COMMISSIONER OF C. EX. Vs. DEWAN CHEMICALS INDUSTRIES

JUDGEMENT

(1.) THIS is an appeal filed by the Revenue. The issue relates to Modvat credit. The party has claimed Modvat credit on Jaw Crusher, Conveyor, Bucket Elevator and Trolleys as capital goods under Rule 57Q of the Central Excise Rules, 1944. The Assistant Commissioner has denied the Modvat credit on the ground that these items are specifically excluded. On an appeal filed by the assessee, the Commissioner (Appeals) has observed that use of the capital goods was explained and as pointed out by the party was not rebutted by the Assistant Commissioner, but the adjudicating authority held that those are materials handling equipment/machinery and accordingly disallowed the credit. According to the Commissioner (Appeals), Modvat credit as such cannot be disallowed in respect of the items in question.

(2.) SHRI Arunachalam, learned JDR submitted that there is a clear finding by the authorities below that the items are classifiable under Heading 8431 and in view of this classification and taking into consideration the explanation to Rule 57Q, these items are not eligible for Modvat credit as capital goods. Shri Surinder Mullick, learned Advocate appearing for the respondents, submits that there is a misclassification of the products before the authorities below. The items are appropriately classifiable under Heading 8428.10, but by mistake based upon the declaration made by the supplier the party has indicated that the items are classifiable under Heading 8431.00.

(3.) I have carefully considered the submissions made by both sides and perused the records. Whether the items in question are classifiable under Heading 8428.10 as claimed by the party before the Tribunal was not an issue before the authorities below. But the classification being a question of law, taking into consideration that it can be raised at any stage, I am of the view that this plea can be admitted at this stage. Further, since the authorities below have not examined the classification issue with reference to the facts, this issue has to go back for reconsideration. Accordingly, I direct the Assistant Commissioner to examine the issue of classification of the products in question and pass an appropriate order according to law after providing the party an opportunity of personal hearing. Thus this appeal filed by the Revenue is allowed by way of remand.