COMMISSIONER OF CENTRAL EXCISE Vs. GULJAG INDUSTRIES LTD.

JUDGEMENT

(1.) IN this Appeal filed by Revenue, the issue relates to availability of Modvat credit under Rule 57AA of the Central Excise Rules, 1944.

(2.) SHRI Kumar Santosh, learned Senior Departmental Representative, submitted that the respondents M/s. Guljag Industries Ltd. have taken Modvat credit of duty paid in respect of storage tanks structure of monorail and platform for drying towers, F.A. towers/I.A. towers/Acid pump tank, all classifiable under Chapter 73 of the Schedule to the Central Excise Tariff Act; that Modvat credit of the duty paid on the goods falling under Chapter 73 is not admissible during the relevant period under Rule 57AA of the Central Excise Rules; that therefore, credit allowed by the Commissioner (Appeals) under the impugned order in respect of these goods is bad in law. He, further, submitted that structure of monorail and platform from drying tower etc. are also appropriately classifiable under Chapter 73 which is not covered by Modvat Credit Rules; that these also cannot be termed as parts/components of various machinery under Chapter 84 by no stretch of imagination. He has placed reliance on the decision in the case of Park Biscuit Ltd. v. CCE, Jaipur, 2002 (145) E.L.T. 724 (Tri.) wherein it has been held that at the relevant time goods falling under Chapter 73 were not specified for the purpose of Modvat credit and accordingly the Tribunal disallowed the Modvat credit in respect of storage tanks.

(3.) COUNTERING the arguments, Shri O.P. Agarwal, learned Chartered Accountant submitted that the respondents are engaged in manufacturing of various chemicals like Sulphuric Acid, Oleum, etc. that storage tanks are being used for storing various chemicals; that in these tanks, process of material also takes place by change of temperature; that the change of temperature within the tanks takes place by circulating hot/cold water in between double walls with a view to control the purity of the material as well as quality of the product; that the other type of storage tanks are connected with scrubber where scrubbing media is circulated to create a vacuum at the bottom of the scrubber; that the bottom of the scrubber is connected to tank to maintain the pressure in side the tanks; that no doubt that they had earlier classified these tanks under Chapter 73 but later on they reclassified these tanks under 84.19; that as per Explanatory Notes of HSN, these tanks are classified under Heading 84.19; that it has been held in Shri Vallabh Glass Works Ltd. v. Union of India, 1984 (16) E.L.T. 171 (S.C.) that if the goods were assessed under Tariff Item 23A at the instance of assessee/ such an order will not operate as legal bar on the assessee to subsequently claim classification under Tariff Item 68. In respect of credit of duty in respect of structure of monorail platform, the learned Chartered Accountant submitted that these are parts of various towers and without these structure/ the work cannot be carried out and as such these are eligible capital goods for the purpose of availing the credit. Finally/ he submitted that they had availed 50% of the Modvat credit on 8 -9 -2000 and the remaining credit was availed on 18 -4 -2001 and as such the availment of subsequent credit is not recoverable under show cause notice dated 29 -3 -2001.