COMMISSIONER OF CENTRAL EXCISE Vs. HILL PACKAGING LTD.

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue. The issues involved in this Appeal are granting of Modvat credit on Welding Electrodes used in the factory of the Appellants for repairing damaged/worn out parts of machinery and also Modvat Credit on Desul fex (sic) (Foundry Chemicals) used in the manufacture of the final product. The impugned order has allowed the credit on both the materials. With regard to the electrodes, it has been held that Welding of damaged/worn out parts is essential to keep the machines running. Besides, the welding electrodes get deposited on machines and become part of machines. The ld. DR. has submitted that Modvat credit is not available on Welding electrodes used for maintenance work.

(2.) WHEN the matter was called none appeared on behalf of the Respondents. However, they have urged that the case may be decided on merits. It is seen that the Tribunal has considered the claim of Modvat credit on welding electrodes used for maintenance work in the case of Vivek Alloys Limited v. C.C.E., Trichy reported in 1998 (104) E.L.T. 541 (T). The Tribunal held that welding electrodes used in the workshop for maintenance work cannot be taken as covered by the terms of definition of capital goods under Rule 57 -Q and that credit would not be available. Thus, this issue remains covered in favour of the Revenue. Therefore, the decision of the Commissioner (Appeals) must be held as not correct.

(3.) WITH regard to Dessuflex, there is no dispute that it is an input in the manufacturing process. The only dispute raised is that the declaration originally filed was not under inputs but under capital goods. It was later on only that the item was declared as an input. The Revenue's submission is that since the declaration was not correctly filed. Originally under inputs and the subsequent declaration was filed three months later, it required condonation by the Assistant Commissioner which has not been granted. The Respondent submits on this point that the Tribunal has already held in the case of Melton India v. C.C.E., Meerut reported in 1999 (105) E.L.T. 339 (T) that if an item is otherwise covered by Modvat scheme its eligibility could be considered under appropriate rules by concerned authority even if declaration is made under incorrect rule (Rules 57A and 57Q of the Central Excise Rules, 1944). They have also referred to the decision of the Tribunal in the case of J.K. Synthetics Ltd. v. CCE, Jaipur reported in 1999 (107) E.L.T. 761.