COMMISSIONER OF CENTRAL EXCISE Vs. TITAN INDUSTRIES LIMITED

JUDGEMENT

(1.) THE respondents are manufacturers of watch and watch components falling under Chapter 91 of the Schedule to the Central Excise Tariff Act and are also availing the facility of Modvat Credit on capital goods.

(2.) THEY took Modvat credit of duty amounting to Rs. 58,752 and Rs. 28,400 on control panel and Evaporation unit respectively in their RG 23 C Part II on 13.4.95 and 13.6.95 respectively. Both the said goods were parts of their air -conditioning plant used as indispensable aid for the process of manufacture. It was only in Air -conditioned atmosphere that the watches and watch components etc. could be manufactured by the Respondents. The credit so taken by the party was disallowed by the Jurisdiction Assistant Commissioner, who also imposed penalty on them for the alleged contravention of Modvat rules. The Assistant Commissioner's order disallowing the Modvat credit was on the ground that the goods in question did not qualify as capital goods for availment of credit under Rule 57Q of the Rules. The aggrieved party preferred an appeal to the Commissioner (Appeals) against the order of adjudication of the Assistant Commissioner. The Commissioner (Appeals) allowed the appeal of the party as per order dated 26.11.97 holding inter alia, that both the aforesaid goods were eligible as capital goods for the Modvat credit under Rule 57Q and that penalty was not imposable inasmuch as Modvat claim involved only interpretation of Modvat rules. The present appeal filed by the Revenue is against the order of the Commissioner (Appeals).

(3.) THE Ld. DR has reiterated the grounds of the Appeal and has prayed for setting aside the order of the Commissioner (Appeals).