Judgment:
1. These appeals have been preferred by the Revenue against the common impugned order in appeal dated 13.7.99 of the Commissioner(Appeals) vide which he had reversed the order in original of the Assistant Commissioner in toto regarding the modvat claim of the respondents.
2. The respondents were engaged in the manufacture of iron and steel products falling under Chapter 72 of the Schedule to the CETA. They availed modvat credit in all of Rs.34,69,303.50 on the capital goods which had been detailed in the order in original of the Assistant Commissioner, during the period 1/95 to 5/96. They were issued four show cause notices dated 26.5.95, 14.9.95, 29.2.95 and 28.6.96 for the recovery of the modvat amount on the ground that they were not entitled to claim the same as the goods in respect of which the modvat credit was taken did not fall within the definition of 'capital goods' under Rule 57-Q of the Central Excise Rules. They contested the correctness of those show cause notices but the Assistant Commissioner did not accept their version and allowed modvat credit only to the extent of Rs.25,19,438.67 and disallowed the credit of Rs.9,49,864.92 through the order in original. This order of the Assistant Commissioner was challenged by the respondents before the Commissioner(Appeals) who reversed the same in toto including the extent to which it was in favour of the respondents through the impugned order in appeal.
3. The Revenue has come up in appeal before us against the impugned order of the Commissioner(Appeals). Notice for today's hearing was sent to the respondents by the Registry on 7.2.2001, but none has come present on their behalf nor any request for adjournment has been received. Therefore, we proceed to decide the appeal after hearing the learned JDR.4. The learned JDR has assailed the validity of the impugned order of the Commissioner(Appeals) on the ground that he has not discussed each and every item in respect of which modvat credit was taken by the respondents and only by following the ratio of the law laid down in Jawahar Mills' case, 1999(32) RLT 379(1) allowed the appeals of the respondents. Therefore, the order deserves to be set aside and the matter be sent back for fresh decision in accordance with the ratio of the law laid by the 5 Member Bench of the Tribunal in CCE, Indore Vs.
M/s. Surya Roshni Ltd., 2001(42)RLT 817 wherein the Jawahar Mills' case had been also discussed.
6. The bare perusal of the impugned order shows that the Commissioner(Appeals) had not discussed in detail as to how the goods in question in respect of which modvat credit was taken by the respondents,were covered by the definition of' capital goods' (SIC)given in Explanation I appended to Rule 57-Q of the Rules.
Moreover, the ratio of the law laid down in Jawahar Mills' case relied by the Commissioner(Appeals) had been reconsidered by the 5 Member (Larger Bench) of the Tribunal in CCE Vs. Surya Roshni Ltd. (supra) and in that case it has been observed that the goods for the purposes of claiming the modvat credit must fall within the ambit of any of the three clauses of Explanation 1 of Rule 57-Q of the Rules. The modvatability of the goods in question had not been considered by the Commissioner(Appeals) from that aspect.
7. Therefore, in our view the impugned order of the Commissioner(Appeals) cannot be legally sustained and the matter deserves to be sent back for fresh decision by keeping in view of the ratio of the law laid down in the above said Larger Bench decision in CCE Vs. Surya Roshni Ltd.(supra).
8. In view of the discussion made above the impugned order of the Commissioner(Appeals) is set aside and matter is sent back to him for fresh decision in the light of the observations made above, after hearing both the sides.
8. Accordingly, all these appeals filed by the Revenue stand allowed by way of remand.