Lloyds Metals and Engineers Ltd. Vs. Commissioner of C.Ex. - Court Judgment

Excerpt:

.....we find that the items like steel plates, ceramic tiles, steel bars etc. are more in the nature of constructional materials. prima facie, we may not be able to appreciate the arguments that they are machinery or accessory or parts of machines to be construed to be eligible capital goods. in the circumstances balance of convenience seems to be in favour of revenue. they have to freeze the entire disputed amount in their modvat account without utilisation. if they do not have balance (as stated by them) they should make a cash deposit of rs. 7 lakhs and furnish a bank guarantee for another sum fo rs. 7 lakhs within a period of three months from the date of receipt of this order failing which their appeals are liable to be dismissed. they should report compliance in the first week of january, 1997 failing which their appeal are liable to be dismissed. on compliance with this direction, there shall be stay against recovery and waiver of pre-deposit of the balance of duty amount.

Judgment:

1. For hearing the applicants (sic)eal on merits covered by aforesaid 3 stay appeals they are required to deposit a total amount of Rs. 14,19,931/-. The issue relates to eligibility for Modvat credit in respect of items like steel plates, angles, bars, ceramic tiles etc.

where the Commissioner has held them as not eligible for Modvat credit on capital goods under Rule 57Q of the Central Excise Rules.

2. Shri N.K. Kapoor the Id. advocate pleads that they are very necessary for attaching the machinery and they are eligible capital goods.

3. After hearing both sides we find that the items like steel plates, ceramic tiles, steel bars etc. are more in the nature of constructional materials. Prima facie, we may not be able to appreciate the arguments that they are machinery or accessory or parts of machines to be construed to be eligible capital goods. In the circumstances balance of convenience seems to be in favour of Revenue. They have to freeze the entire disputed amount in their Modvat account without utilisation. If they do not have balance (as stated by them) they should make a cash deposit of Rs. 7 lakhs and furnish a bank guarantee for another sum fo Rs. 7 lakhs within a period of three months from the date of receipt of this order failing which their appeals are liable to be dismissed. They should report compliance in the first week of January, 1997 failing which their appeal are liable to be dismissed. On compliance with this direction, there shall be stay against recovery and waiver of pre-deposit of the balance of duty amount.