NRB BEARINGS LTD. Vs. CCE

JUDGEMENT

(1.) This is the parties appeal against the above captioned impugned order dt. 30.9.1998 praying for setting aside the same and allowing the appeal with consequential relief.

(2.) THE brief facts of the case are that the appellant manufactures Needle Roller Bearings falling under Chapter 8482.00, of the Schedule of the Central Excise Tariff Act, 1985 and availed modvat credit under Rule 57 -Q on the capital goods. Show cause notice was issued on 30.11.1994 to show cause as to why the modvat credit amount of Rs. 6,15,582/ - should not be disallowed and recovered under Rule 57 -I/57 -U of the Central Excise Rules. It was replied on 12.12.1994 denying the allegations by the appellant. After hearing the party, the Additional Commissioner Aurangabad by his order dt. 20.3.1997 disallowed the modvat credit of Rs. 168,361/ - in the case of 4 items at Serial No. 3, 7, 9 & 10 of the show cause notice with the direction to pay the same. In the appeal preferred by the appellant the Commissioner (Appeals) Central Excise and Customs, Pune under the impugned order has disallowed the credit in respect of Profile Projector Lathe Machine and serial No. 10 of the show cause notice. Hence this appeal. The appellant has contended that the profile projector is used for checking end releaved radius after the hammering operation which is a quality check and any deformity found in the Needle Rollers, can be found only after checking the end radius profile with the profile projector. Without which the quality needle rollers without defects, cannot be manufactured and marketed. It ensures that rollers manufactures are of required quality and specifications, and it is essential in the manufacturing of capital goods. Regarding the lathe machine the appellant has contended that it is always used in the manufacturing units for various operations of cutting the excessive portion of the shells, used in the manufacturing of needle roller bearings, which is one of the process of the manufacturing of a needle roller bearings. Regarding the Serial No. 10 of the show cause notice about the denial of the credit of Rs. 94,947/ - it is contended that there is no dispute about the fact that the machinery involved have been received and used in the manufacturing product. The credit of Rs. 94,947/ - has been utilised only after the later day. In the course of the argument it is submitted that the date of the import is 24.5.1994 and 23.10.1994 which are machines. The dispute is only regarding the entry in the quantity register dt. 14.10.1994 by mistake R.G. 23 Part I Entry of Rs. 94,947/ - was not touched and still balance is there. The revenue is not affected. As per, 1999 (30) R.L.T. 337 :, 1999 (80) ECR 789 (T) the credit is available on profile projector and lathe machine. Regarding Sr. No. 3 in the show cause notice the appellant has admitted the case of the department and debited Rs. 50/ -. The Ld. JDR has submitted that regarding Sr. No. 10 early entry, the Assistant Commissioner is not informed, and no catalogue is produced to show the bringing up the change by the use of the capital goods involved in this case.

(3.) THE appellant has produced Synopsis of Important Dates/Events and Submissions, according to which the profile projector is falling under Chapter 9031.00 which has been specifically treated as capital goods when used in the factory of the manufacture. It is used for checking end radius profile. The needle roller bearings manufacture requires very accurate dimensional standards for each component used therein. The profile projector is used during the operation for checking the dimensions of each of the components which are used in the needle roller bearing. Unless the profile of the component products used in the needle bearings are exactly as per the drawing and are checked, the performance of the bearings produced by these components will not be accurate. By the use of profile projector dimensions of various components are adjusted/machined for their subsequent use. Lathe Machine is for shaping a work -piece by gripping it in a holding device and rotating it under power against a suitable cutting tool for turning, boring, facting or threading, various components shell manufactured by then have excessive lip height, which are to be cut before use, without which it cannot be used in the manufacture of bearings. Lathe machine is one of the primary machine used in the engineering units for cutting operation. The appellant further contended that the credit of Rs. 94,947/ - is taken on the imported capital goods namely Blanchard Vertical Spindle Surface Grinder having Table Trauerse. There is no dispute about the receipt of the capital goods in the factory and eligibility of the credit thereon. It is human error to make an entry of the money credit account in the R.G. 23 C Part II on earlier date than the date of entry in the quantity credit in R.G. 23C Part -I. There is no allegation that the appellant have availed money credit earlier to quantity credit and overdrawn for the clearing goods with a view (to) defraud the Government. When the capital goods were received on 23.10.1994 there was an opening balance of Rs. 1,27,660/ -, out of which on 1,23,260/ - was utilised for the clearance of the final product and still there was a closing balance of Rs. 4,400/ -. Even without taking credit of Rs. 94,947/ - before making entry in the Quantity Register, Government revenue was not at all affected resulting in the overdrawal, which shows a clerical error.