INDIA CEMENTS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) These are two applications filed by M/s. India Cements Ltd. for waiver of pre -deposit of duty of Rs. 47,48,908/ - and Rs. 22,30,892/ - which is disallowed as Modvat credit on parts and components of capital goods.

(2.) Shri V. Ravindran, learned Consultant for the appellants, submitted that all the items are parts or components of Cement machinery and as such they are eligible to take Modvat credit of the duty paid thereon; that even articles of iron and steel structures are parts of the machinery as they are all erected on the platform made out of such material; that for the past period, the Commissioner (Appeals) has allowed Modvat credit to them in respect of the said materials falling under Heading 84.31 of the CETA, 1985 which has not been challenged by the Department and has attained finality. He has also relied upon the decision in their own case vide final order No. 404 to 407/2004 dated 14 -5 -2004 [2004 (175) E.L.T. 476 (Tribunal)] that capital goods credit in respect of civil construction machinery is eligible. Finally he has pleaded financial hardship as the applicants have suffered a cumulative loss of Rs. 95.93 crores by 31 -3 -2004. 4. Opposing the prayer, Smt. R. Bhagyadevi, learned SDR, submitted that steel structures cannot by any stretch of imagination be termed as parts of the cement machinery as the cement machinery is complete even without these structures. She has further submitted that Modvat credit was taken in 1997 and has been utilised almost eight years ago and as such/the appellants may be directed to deposit certain amount for the purpose of Section 35F of the CE Act, 1944. 5. We have considered the submissions made by both the sides. Prima facie, submissions made by the learned, SDR are correct that steel structure/platform cannot be regarded as parts of capital goods. As per Rule 57Q of the CE Rules, 1944, only the goods falling under specified Tariff Heading were capital goods. As the issue regarding admissibility of credit in respect of the goods in question is an arguable one, the appellants have not made out a prima facie case for waiver of pre -deposit of the entire amount. Taking into consideration their plea of financial hardship, we direct the appellants to pre -deposit an amount of Rs 10,00,000/ - (Rupees Ten lakhs) towards duty within a period of eight weeks from today, subject to which pre -deposit of the balance of duty and the entire penalty is dispensed with and the recovery thereof is stayed during the pendency of the appeal. Matter will be called for reporting compliance on 16 -5 -2005.