MONNET ISPAT LTD. Vs. CCE

JUDGEMENT

(1.) Examined the records and heard both sides.

(2.) The short question which arises in this appeal is whether the items listed below were eligible as capital goods for Modvat credit under Rule 57 -Q during the period May, 1994 to November 1995:

(3.) The appellants were manufacturing sponge iron and MS ingots. For the manufacture of the former product, they were using a Rotary Kiln while for the manufacture of the latter, they were using an Induction Furnace. The appellants took modvat credit on all the above items claiming the same to be eligible capital goods under Rule 57Q. The Department, by show -cause notice, proposed to disallow the credit on the ground that the items were not eligible capital goods for Modvat credit under Rule 57 -Q. In respect of Transformer (11 kV), the Department maintained that since transformers of voltage 75 kV and above were specifically brought within the coverage of capital goods under Clause (d) of the Explanation to Rule 57 -Q(1), w.e.f. 16.3.1995 (under Notification No. 11/95 -CE (NT), transformers of lower voltages like the one involved in the instant case stood excluded from the coverage of capital goods. The Department's view was contested by the party. Ultimately, the jurisdictional Commissioner of Central Excise, in adjudication of the dispute, held that the afore -mentioned items were not eligible for Modvat credit under Rule 57 -Q. Consequently, Modvat credit amounting to Rs. 6,42,674 stood disallowed to the assessee. Hence the present appeal.