MRPL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE original authority denied CENVAT Credit of Rs. 86,37,120/ - and Rs. 86,64,135/ - to the appellants in respect of various items claimed by the latter to be eligible capital goods. It also imposed penalty of Rs. 5 lakhs on the assessee. The orders -in -original were upheld by ld. Commissioner (Appeals). Hence the above appeals and the present applications.

(2.) AFTER examining the records and hearing both sides, we have not found prima facie case for the appellants in respect of many of the items in question, particularly, what are called "Pipefittings". The assessee has considered structural support to pipes, as pipe fitting, the correctness of which is extremely doubtful. As regards carbon steel plates, which were received in their factory during 1997 -98 and were used for fabricating storage tanks after March 2001, their claim is that credit of duty paid on such sheets is available to them in terms of Rule 57AA(a)(vii). The item included in the category of Cenvatable capital goods in terms of the said provision is "storage tank", which was so included with effect from 1.3.2001. The storage tank was fabricated after this date, out of steel plates which were received in the factory long back when 'storage tank' was not a Modvatable capital goods. A major part of the credit disallowed to the assessee is in respect of pipes and pipefittings and storage tanks. We have not found prima facie case against the denial of such credit. Ld. Counsel for the appellant has not been able to provide break -up of the credit amounts relatable to these items or other items, in answer to our query. In the circumstances, we queried ld. Counsel as to how much of the credit amount can be deposited for the purpose of Section 35F of the Central Excise Act, 1944, and he has, after taking instructions, specified 30%. We have heard ld. SDR also, who is not averse to a direction to the assessee to predeposit the above amount.

(3.) WE direct the appellants to predeposit Rs. 50,00,000/ - (Rupees fifty lakhs) (less than 30% of the amount of credit disallowed) within four weeks and to report compliance on 5th June, 2006.