CCE, COIMBATORE Vs. COIMBATORE VIJAY COTTON AND SYNTHETICS

JUDGEMENT

(1.) THIS appeal filed by the Revenue is against the order of the Commissioner (Appeals) allowing Modvat credit of Rs. 2,28,200/ - to the respondents on blow -room machinery. Examined the records. The credit in question was taken on 1.4.1998, i.e. after Rule 57Q of the Central Excise Rules. 1944 was recast under Notification No. 6/97 -CE(NT) dated 1.3.1997. Sub -Rule 7 of that rule required that no credit of duty on the capital goods specified under the Table to Sub -Rule (1) of the Rule shall be taken on a date prior to the date on which such goods were installed in the factory of the manufacturer as certified by the manufacturer or a person designated by him for the purpose. In the show -cause notice which has led to these proceedings, the department proposed to deny the Modvat credit taken by the assessee on the aforesaid goods, on the ground that the goods had not been installed in the factory before the credit was taken. The proposal was contested. In adjudication of the dispute, the jurisdictional Assistant Commissioner upheld the department's allegation and disallowed the credit. But in the appeal preferred by the aggrieved assessee, the Commissioner (Appeals) allowed the credit after recording a finding that the machinery in question had been installed in the assessee's factory as on 11.8.1999. Hence the present appeal.

(2.) THE appellant is represented by the Ld. JDR Shri C. Mani. There is no representation for the respondents in spite of notice. Reiterating the grounds of the appeal, the DR submits that the machinery in question was installed only on 11.8.1999 and, therefore, the credit taken of the duty paid on the item, as early as on 1.4.1998 was not admissible. He further submits that, though during the adjudicatory proceedings, the assessee had undertaken to adduce documentary evidence of installation of the capital goods, they did not let in any such evidence. It was in the first appellate stage that they produced a certificate from the Chartered Engineer, which only certified to the effect that the machinery had been installed as on 11.8.1999. Ld. DR submits that the report of the jurisdictional Superintendent of Central Excise, which was called for by the adjudicating authority, also showed that the machinery had not been completely installed as on 21.4.1999 (the date on which the Superintendent visited the factory). The D.R., therefore, contends that there is no evidence, on record, of the machinery having been installed before the date on which the credit in question was taken. He prays for allowing the appeal. The requirement of Sub -rule 7 of Rule 57Q as the Rule stood on 1.4.1998 was mandatory. This legal position is not contested before me. Going by the report of the Superintendent of Central Excise or the certificate of the assessee's Chartered Engineer, one would safely conclude that, as on the date on which the credit was taken, the machinery in question was not in the installed condition in the assessee's factory. The mandate of Sub -Rule 7 of Rule 57Q has not been observed in this case. The credit in question is, therefore, not admissible to the assessee. I, therefore, set aside the order of the Commissioner (Appeals) and restore the order of the Assistant Commissioner in so far as the credit in question is concerned. Revenue's appeal stands allowed.