Larsen and Toubro Ltd. Vs. Commr. of Cus. and C. Ex. - Court Judgment

Excerpt:

1. on hearing both sides, it appears that the matter was capable of being decided at this stage. both sides agreeing, this was done, after granting waiver of pre-deposit of duty of rs. 78,184/- 2. the appellants have a gas turbine installed in their factory.insulation needs to be periodically changed. the insulating material was received in a roll. the commissioner (appeals) upheld the denial of modvat credit on the observations that a big roll could not be called as spares. hence the appeal.3. it is correct that for placing around a pipe the material would have to be cut. it is also correct that it would be a spare only when so cut. but as the appellants had a pleaded before the commissioner, they could not go to the market and seek part cuts from a roll. it is normal practice to secure the material in roll form for the sake of convenience. it was therefore, wrong on the part of both authorities to deny credit on the material in roll.

Judgment:

1. On hearing both sides, it appears that the matter was capable of being decided at this stage. Both sides agreeing, this was done, after granting waiver of pre-deposit of duty of Rs. 78,184/- 2. The appellants have a gas turbine installed in their factory.

Insulation needs to be periodically changed. The insulating material was received in a roll. The Commissioner (Appeals) upheld the denial of Modvat credit on the observations that a big roll could not be called as spares. Hence the appeal.

3. It is correct that for placing around a pipe the material would have to be cut. It is also correct that it would be a spare only when so cut. But as the appellants had a pleaded before the Commissioner, they could not go to the market and seek part cuts from a roll. It is normal practice to secure the material in roll form for the sake of convenience. It was therefore, wrong on the part of both authorities to deny credit on the material in roll.