COMMISSIONER OF CENTRAL EXCISE Vs. CHEMPLAST SANMAR LTD.

JUDGEMENT

(1.) Appeal is filed against the order dated of the Customs, Excise and Service Tax Appellate Tribunal, Chennai, in Final Order No. 570 of 2006. The 1st respondent/assessee was engaged in manufacturing of PVC resins and were availing MODVAT credit under Rule 57Q of the Central Excise Rules 1944 (hereinafter referred as "Rules"). The assessee has taken such MODVAT credit of duty paid on capital goods used as construction materials/measuring equipments/pipes and equipments/tubes/flanges/bolts and nuts/Valves/Gauges/Pressure Gauge/Indicator/Fork lift/Gear boxes/shafts/bearings/paints which were used in the manufacture of final product. According to the Revenue, the above said goods do not either bring about any change in the manufacture of final product or used for producing or processing exercisable finished products. Therefore, a show cause noticed dated 24.10.1995 was issued as to why the irregular availment of MODVAT credit of Rs. 9,74,430/- should not be disallowed under the Rules.

(2.) The assessee replied by stating that the above goods are capital goods within the meaning of Rule 57Q and stated that they are eligible for such credit. However, the original authority found that the goods are not capital goods used in manufacturing the final products and disallowed the credit.

(3.) An appeal was preferred against the order before the Commissioner of Appeals. The Commissioner of Appeals partially allowed the appeal by stating that some of the goods are capital goods and some of the goods are not capital goods. The assessee preferred further appeal before the Tribunal on the goods which were not admitted as capital goods for the periods prior to 16.3.1995 as Rule 57Q came into force wef 16/3/1995.