DAYA SUGAR Vs. COMMISSIONER CENTRAL EXCISE MEERUT 1

JUDGEMENT

(1.) The appellant is a unit of M/s Daya Engineering (Sleeper) Ltd. Naya Bans, Gagalheri, District Saharanpur and is engaged in the manufacture of sugar and molasses falling under Chapter sub-heading No.1701.31, 1701.39 and 1703.10 of the Central Excise Tariff Act, 1985. The appellant was availing MODVAT credit on the capital goods under the erstwhile Rule 57-Q of the Central Excise Rules and filed a declaration under Rule 57-T of the Rules for availing credit on various capital goods.

(2.) During the course of scrutiny, for the period March, 2000 to November, 2000, it was observed that the appellant had wrongly taken a credit of Rs.9,63,016/- on various items under Rule 57-Q of the Central Excise Rules, 1944 (hereinafter referred to as the "Rules"). It was found that the MODVAT credit was taken on various items such as plates, sections, columns, staging material etc. which were not used in the manufacture of specified goods. The appellant had availed MODVAT credit on the basis of suppliers invoices for the items under Chapter 84 which were duly mentioned in the invoices in respect of the supplies of parts used for capital goods. It was alleged that these goods were used in the manufacture of specified goods in the factory of the appellant. The goods so received such as plates, sections, sheets, staging material, etc. were used in the factory of the appellant for the purpose of constructing platforms for the use of running of machinery, for supporting equipments used in the factory.

(3.) Based on the scrutiny, the Deputy Commissioner, Central Excise, Saharanpur issued a show cause notice to the appellant to show cause as to why the MODVAT credit availed by the appellant on the items such as plates, sections, columns, staging material, etc. under Rule 57-Q of the Rules should not be disallowed contending therein that these items cannot be termed as "components, spares or accessories in the light of the definition of "Capital Goods".