COMMISSIONER OF CENTRAL EXCISE Vs. INDIA CEMENTS LTD.

JUDGEMENT

(1.) IN the impugned order, ld. Commissioner (Appeals) allowed Modvat credit to the respondent in respect of iron and steel materials and parts and components used in the fabrication of Generator Set and crusher plant within the factory premises during the period Mar. to May, '99. He also allowed Modvat credit to the party in respect of components of Wagon Drill used in mines for limestone excavation during the same period. Both were capital goods credit under Rule 57Q of the Central Excise Rules, 1944. Aggrieved, the Revenue has filed this appeal.

(2.) AFTER examining the records and hearing both sides, I find that it is not in dispute that the Wagon Drill was used in the limestone mines off the cement factory. Hence components of the said capital goods were not eligible for Modvat credit under Rule 57Q as per para 22 of the Supreme Court's judgment in Jaypee Rewa Cement v. Commissioner . The ld. Commissioner (Appeals) erred in granting capital goods credit to the assessee on the above components which were used outside the cement factory. The challenge, to this decision of the lower appellate authority, in the present appeal of the Revenue has to be sustained. The appeal is allowed to this extent.

(3.) GENSET (Heading No. 85.02 of the CETA Schedule and Crusher (Heading No. 84.74) were eligible capital goods for Modvat credit under Rule 57Q(1) as the Rule stood during the period of dispute. The parts and components in question were used in the fabrication of these capital goods. Hence the benefit of Sl.No. 5 in the Table annexed to Rule 57Q(1) was available to such parts and components as rightly held by ld. Commissioner (Appeals). The Revenue's challenge against this part of the impugned order cannot be sustained. The appeal is dismissed to this extent.