COMMISSIONER OF CENTRAL EXCISE Vs. MODERN STEELS LTD.

JUDGEMENT

(1.) THE appellant challeges the order of the Commissioner (Appeals) by which the order of the adjudicating authority disallowing cenvat credit of the total amount of Rs. 4,42,296/ -, as proposed in the three show cause notices, and imposing penalty of the like amount as well as charging interest, was set aside.

(2.) THE Commissioner (Appeals) relied upon the decision of the Tribunal in Simbhaoli Sugar Mills Ltd. v. CCE reported in 2001(135) ELT 1239(Tri. -Delhi), in which it was held that if the items were used in the construction of the wall or any part of the plant structure as construction material, that part should be disallowed. However, if the same material is used for raising structure to support various machines parts, then they will be covered by explanation to Rule 57Q.

(3.) AS per the show cause notices, during the period between 2003 and October 2003, the noticee had wrongly taken and utilized credit of central excise duty paid by them at 16% on receipt/purchase of CTD bars, angle, channel, MS bar, joist and shapes and sections falling under Chapter 72 of the Central Excise Act, 1985 for their project work, treating these goods as capital goods. Since it appeared that they did not fall within the purview of the definition of "capital goods" under Rule 2 of the CENVAT Credit Rules, 2002, the Revenue initiated the proceedings for recovery of the wrongly availed cenvat credit.