STEEL STRIPS LIMITED Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE facts of this case are as briefly stated below : - The appellants are manufacturers of iron and steel products falling under Chapter 72 of the Schedule to the Central Excise Tariff Act, 1985 and are availing the Modvat credit facility in respect of inputs under Rule 57 A of the Central Excise Rules, 1944. During the period June to August, 1993, the appellants took Modvat credit of the duty paid on certain goods treating the same as 'inputs' under Rule 57A ibid. These goods included nozzles. These nozzles were used for conveyance of liquid metal from laddie to tundish and again from tundish to mould. It was on the basis of such use that the appellants treated the nozzles to be inputs used in or in relation to the manufacture of their final products and took the credit of the duty paid thereon under Rule 57A ibid. This was challenged by the Department by show cause notice and such challenge was contested by the party in their reply to the notice. Ultimately, in adjudication of the dispute, the jurisdictional Deputy Commissioner of Central Excise disallowed the Modvat credit taken by the party in respect of most of the items including the nozzles. In the appeal filed by the party against this decision of the adjudicating authority, the Commissioner of Central Excise upheld the decision of the adjudicating authority in respect of nozzles while reversing that authority's decision in respect of the remaining goods. It is against the disallowance of Modvat credit on nozzles by both the lower authorities that the present appeal has come up for hearing before the Tribunal.

(2.) I have carefully examined the orders of both the lower authorities and the connected records of the case and have heard the learned Advocate, Shri Jitender Singh for the appellants and the learned JDR, Shri Y.R. Kilania for the respondent/Revenue.

(3.) THE learned Advocate has, at the outset, submitted that the issue of modvatability of the nozzles in relation to the period in dispute stands squarely covered by the decision of the Tribunal in the case of Modella Steel Alloys Limited v. Commissioner of Central Excise, Indore [1999 (108) E.L.T. 463 (T)]. Fairly enough, he has also brought to my notice the earlier decision of the Tribunal in the case of Panchmahal Steel Limited v. Collector of Central Excise, Vadodara [1996 (83) E.L.T. 91 (T)], wherein it had been held that nozzles were covered by the excluded category under the Explanation to Rule 57A of the Central Excise Rules and hence not eligible for Modvat credit under the said Rule. The learned Advocate, addressing the Bench with reference to both the aforecited decisions, has submitted that the decision of the Tribunal in the case of Panchmahal Steel Limited is no longer good law on the issue of modvatability of nozzles in the light of the decision of a coordinate Bench of the Tribunal in the case of Modella Steel Alloys (supra) which was rendered on the basis of the ratio of the decision of a Larger Bench of the Tribunal with regard to the scope of the Explanation to Rule 57A ibid in the case of Union Carbide India Limited v. Collector [1996 (86) E.L.T. 613 (T)].