INDIA CEMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE following substantial questions of law are raised by the assessee in the present Civil Miscellaneous Appeal filed as against the order of the Customs, Excise and Service Tax Appellate Tribunal, Chennai passed in Final Order No. 1028/2004, dated 10 -11 -2004 [2005 (181) E.L.T. 258 (Tri. -Chennai)]: - -

(2.) THE Adjudicating Authority pointed out that though various items mentioned in the show cause notice were components/spares, etc., of machines/machinery, they were not components/spares of eligible capital goods as specified under Rule 57Q of the Central Excise Rules, 1944, as it stood on the date of receipt of those components/spares into the factory of the assessee. Thus, he rejected the claim on Modvat credit. However, the Adjudicating Authority granted the relief partially and rejected the claim of the assessee in respect of most of the items and these items were received in the factory during the period from 23 -7 -1996 to 31 -8 -1996. During this period, items falling under Chapter Heading 84.74 of the Central Excise Tariff Act were excluded from the Table, specifying the eligible capital goods under Rule 57Q. Prior to 23 -7 -1996, the eligible capital goods were described under Rule 57Q in broader terms, namely, machine/machinery equipments. However, with effect from 23 -7 -1996, the eligible capital goods were specified in terms of the Tariff Chapter Heading number and sub -heading number. Since Heading No. 84.74 was excluded from the list of eligible capital goods till 31 -8 -1996 when under the amendment to Rule 57Q by Notification No. , goods under Heading 84.74 were once again brought under the eligible category, the assessee was not eligible to Modvat credit under Rule 57Q. Thus, while allowing Modvat credit of Rs. 6,93,934/ - under Rule 57Q, he disallowed Modvat credit to an extent of Rs. 9,66,435/ -.

(3.) AGGRIEVED by this, the assessee went on appeal before Customs, Excise and Service Tax Appellate Tribunal, where the assessee took the contention that as Notification No. dated 31 -8 -1996 was clarificatory in nature, retrospective effect had to be given to the said amendment. Further, considering the fact that prior to 23 -7 -1996, the assessee had availed the benefit of Modvat credit on components, spare parts and accessories thereof, that benefit should have been taken as available to the assessee in respect of those goods received during the disputed period, when Notification No. ., dated 23 -7 -1996 was in vogue. The claim of the assessee was however rejected by the Tribunal on the ground that Notification No. , dated 31 -8 -1996 could not be taken as clarificatory in order to read retrospective effect to it to cover the period from 23 -7 -1996 to 31 -8 -1996 to grant the benefit of Modvat credit in respect of those specified items, which were excluded from the list of eligible capital goods under Notification No. dated 23 -7 -1996. Aggrieved by this, the present appeal has been filed before this Court by the assessee.