N.R.C. Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. common order is passed since the issues in appeals is common. the issue in this case is the denial of modvat credit on capital goods under rule 57q and penalty imposed on the appellants.2. the appellants have produced a chart showing the capital goods/inputs use and also the case law which are directly covering the items under dispute as well as having persuasive value. this leads to a conclusion that the credit should be eligible.3. on the perusal of this chart and the dr concurring it is to be held that credit on all items is given in the chart below:nrc ltd vs cce modvat [sic](srno25) penalty rs.7,100/-period april 95 used for holding the copper place in anode assembly for power supply in caustic soda production 1999(114)elt 347 (t) 2003 (54) rlt 801 (t) 2000 (116) elt 528 (t) 2002 (147) elt 570 (t) - vindhya tele links - steel authority of - vindhya telelinks - d.s.m.sugar mills attached to cells used in the causticsoda manufactured- parts of circuit breaker pvc cb 500, pvt 600 thinner, oroanic chemicals, pvc acs organic chemicals used for avoiding electrical shocks to keep the machines running continuously e/160/2000-hum nrc ltd vs cce modvat rs.3,85,276/- penalty rs.3,000/-sr.no.29)period may '95to july'95,oct'95,nov'95,march/'96,oct'96 t j use covereiused for ueeff tor transporting caustic vapours and combustion air to the related equipments 3 by case laws - (direct/persuasive}[del: 1m (10j^ clt 176(t) :del] - sumil cynchm-fctl 1998 (102)elt 384 (t)- star paper mills 1998(98)elt 674 (t)- da8ur india ltd.this is automatic carton strapping and tapping machines in which rayon cakes are packed 2001 (46) rlt 301 (t) - advani overlikon 1999(112) elt 50 (t) - associated capsuies 2000 (116) elt 132 (t) - modi tyre 2000 (116) elt 461 (t) - punjab chem ft ph.used for softening water which is used for preparation of viscose used in manufacture of rayon used for painting caustic soda process pipe lines to avoid, corrosion - cas innutsy e/354/2000-mum nrc ltd vs cce modvat rs.1.04.340/-srnn penalty rs.3,000/-^sk10"^iu period march '95 1999(107) elt 176 (t) - sunil synchbm ld. 1999(107) elt 66 (t) - pharmasynth formulati used for storing and circulating the viscose for purification which are used for manufacture of rayon yarn 1998(102)elt 384 (t)- star paper mills ltd 1998 (98)elt 674 (t)- dabur india ltd.e/469/2qqo-mum nrc ltd vs cce modvat rs.39,669/- ... penalty rs. 2,700/- sr. no.31 used for transfer of furnace oil which is used as fuel for producing heat for heating heat transfer salt used for fitting various machines falling under chapter heading 8445/ 8479 used for manufacture of final product rayon yarn, nylon yarn and various chemicals..1999 (114) elt 347 (t) - vindhya telelinks 2000 (118) elt 608 (t) - search chem ind.2000 (118) elt 196 (t) - dhir cements used for driving the spindles in saurer allma machine where nylon yarn is wound.2001 (133) elt 90 (t) - oswal fats 1 oil 2002 (51) rlt 458 (t) - dalmia cements 2000 (116) elt 461 (t) - pubjab chem & p these are parts of hopper. boiler is essential for generation of steam which is used for manufacture of various final products 2002 (150) elt 650 (t) - united phosphorc 2000 (119) elt 611 (t) - global sugar lt: 2003 (54) rlt 544 '"' (net ispat ltd.used for running various motors required for manufacture of fina products.2001 (133!) elt 90 (t) - oswal fats & oils 2002 (51) rlt 458 (t) - dalmia cements 2000 (116) elt 461 (t) - pubjab chem * pharm unbrako alien key, socket head, caps screw, socket set, screw, hex socket alien screw used for fitting & installing various machines required for manufacture of final products.1997 (95) elt 655 (t) - century cements 2001 (130) elt 903 (t) - ispat alloys 2002 (51) rlt 49 (t) - max g.b.ltd.ultrasonic cleaner is, ideally suited for this precision work, which cleans the spinnerets thoroughly without inflicting any damage to the diameter of the orifices e/536/2000-mum nrc ltd vs cce modvat rs.1,57,979/-sr.no.34(sick) unbrako socket, alien cap screw, set screw, grab screw, alien key, cap screw, socket set screw used in fitting & installing various machines required for manufacture of final products.1997 (95) elt 655 (t) - century cements 2001 (130) elt 903 (t) - ispat alloys 2002 (51) rlt 49 (t) - max q.b.ltd.rods are used for welding pipe lines, machine parts, tanks etc. which are use for manufacture of rayon yarn, nylon yarn, and chemicals.1999 (105) elt 124 (t) - mewar sugar mil 1999 (111) elt 608 (t) - k.l.steel ltd. 1999 (108) elt 47 (t) - jawahar m-ills used for regulating the speed of pump through which viscose is pumped as per process requirement for manufacture of rayon yarn.1997 (23) rlt 306 (t) - maihar cement 2002 (53) hlt 294 (t) - mawana sugar 2002 (53) rlt 304 (t) - jindal strips 1999 (105) elt 124 (t) -.mewar sugar used for commutation of silicon control rectifier through which electrical supply 1e given to pot motors where rayon yarn 1s wound.1998 (98) elt 156 (t) - vivek alloys lt 2003 (156) elt 918 (t) - jindal strips 2002 (51) rlt 951 (t) - chemplast india 2002 (49) rlt 813 (t) - samcor glass used for fitting various machines falling under chapter heading 8445/ 8479 used for manufacture of finala product hayon yarn, nylon yarn and various chemicals.2000 (116) elt 528 (t) - vindhya telelin 2000 (118) elt 608 (t) - search chem inc 1999 (114) elt 347 (t) - vindhya telelin 2000 (118) elt 196 (t) - dhir cements used for carrying sulphuric acid to the spinning machine for manufacture of rayon yarn.2002 (51) rlt 1075 (t) - chemplast india 1998 (102) elt 488 (t) - j .k.ph armagh em used for running various motors required for manufacture of final products.2001 (133) elt 90 (t) - oswal fats & oils 2002 (51) rlt 458 (t) - oalmia cements 2000 (116) elt 461 (t) - pubjab chem i phaf fuse fitting & also with hrc fuse, cfs with hrc f/l, nbc * hbc fuse link, conductors do! starter, also fuse board w/o indicator fuse link used for giving electrical supply to the rayon spinning machine falling under csh 8445 where rayon filament are formed.1997 (95) elt 301 (t) - kanoria chemicals 2002 (149) elt 1291 (t) - steel strips ltd. 2001 (137) elt 1159 (t) - jindal strips ltc 1998 (101) elt 422 (t) - bhushan steels used for operating solenoid valves in bleaching process. these valves are used for supplying oil to bleaching machine falling under csh 8481 where cakes are bleached.2002 (143) elt 503 ( p*h ) - s. b. packaging 2002 (51) elt 837 (t) - shasun chemicals used for making holes to plates, shafts etc. which are in the 1o nature of dril bite these are fitted 1n plug valves. . these valves are fitted on various pipe lines in manufacturing process this is a part of bleaching dryer. dryer is used for drying the rayon cakes.is held to be admissible except on items safety shower and hss parallel shank jobber series twist drills.4. since the credit is found to be eligible on almost the entire disputed items no penalty is found to be eligible to be imposed on the appellants since the issue of eligibility of capital goods credit was itself in doubt. besides, a very small amount is been denied. appeals allowed as per findings herein above i.e. penalty set aside and credit of all items except the items safety shower and hss parallel shank jobber series twist drills.

Judgment:
1. Common order is passed since the issues in appeals is common. The issue in this case is the denial of modvat credit on capital goods under Rule 57Q and penalty imposed on the appellants.

2. The appellants have produced a chart showing the capital goods/inputs use and also the case law which are directly covering the items under dispute as well as having persuasive value. This leads to a conclusion that the credit should be eligible.

3. On the perusal of this chart and the DR concurring it is to be held that credit on all items is given in the chart below:NRC LTD vs CCE MODVAT [SIC](SrNo25) PENALTY RS.7,100/-PERIOD APRIL 95 Used for holding the copper place in Anode Assembly for power supply in Caustic Soda production 1999(114)ELT 347 (T) 2003 (54) RLT 801 (T) 2000 (116) ELT 528 (T) 2002 (147) ELT 570 (T) - VINDHYA TELE LINKS - STEEL AUTHORITY OF - VINDHYA TELELINKS - D.S.M.SUGAR MILLS Attached to Cells used in the causticSOda manufactured- Parts of Circuit Breaker PVC CB 500, PVT 600 Thinner, Oroanic Chemicals, PVC ACS Organic Chemicals Used for avoiding electrical shocks to keep the machines running continuously E/160/2000-Hum NRC LTD vs CCE MODVAT RS.3,85,276/- PENALTY RS.3,000/-Sr.No.29)PERIOD MAY '95TO JULY'95,OCT'95,NOV'95,MARCH/'96,OCT'96 t J USE COVEREIUsed for ueeff tor transporting caustic vapours and combustion air to the related equipments 3 BY CASE LAWS - (DIRECT/PERSUASIVE}[DEL: 1m (10J^ CLT 176(T) :DEL] - SUMIL CYNCHM-fcTL 1998 (102)ELT 384 (T)- STAR PAPER MILLS 1998(98)ELT 674 (T)- DA8UR INDIA LTD.This is automatic carton strapping and tapping machines in which rayon cakes are packed 2001 (46) RLT 301 (T) - ADVANI OVERLIKON 1999(112) ELT 50 (T) - ASSOCIATED CAPSUIES 2000 (116) ELT 132 (T) - MODI TYRE 2000 (116) ELT 461 (T) - PUNJAB CHEM ft PH.Used for softening water which is used for preparation of viscose used in manufacture of rayon Used for painting caustic soda process pipe lines to avoid, corrosion - CAs InnutsY E/354/2000-Mum NRC LTD VS CCE MODVAT RS.1.04.340/-SrNn PENALTY RS.3,000/-^SK10"^iU PERIOD MARCH '95 1999(107) ELT 176 (T) - SUNIL SYNCHBM LD. 1999(107) ELT 66 (T) - PHARMASYNTH FORMULATI Used for storing and circulating the viscose for purification which are used for manufacture of Rayon yarn 1998(102)ELT 384 (T)- STAR PAPER MILLS LTD 1998 (98)ELT 674 (T)- DABUR INDIA LTD.E/469/2QQO-Mum NRC LTD vs CCE MODVAT RS.39,669/- ...

PENALTY RS. 2,700/- Sr. no.

31 Used for transfer of furnace oil which is used as fuel for producing heat for heating heat transfer salt Used for fitting various machines falling under Chapter Heading 8445/ 8479 used for manufacture of final product Rayon Yarn, Nylon Yarn and various chemicals..

1999 (114) ELT 347 (T) - VINDHYA TELELINKS 2000 (118) ELT 608 (T) - SEARCH CHEM IND.2000 (118) ELT 196 (T) - DHIR CEMENTS Used for driving the spindles in saurer Allma machine where Nylon Yarn is wound.

2001 (133) ELT 90 (T) - OSWAL FATS 1 OIL 2002 (51) RLT 458 (T) - DALMIA CEMENTS 2000 (116) ELT 461 (T) - PUBJAB CHEM & P These are parts of Hopper. Boiler is essential for generation of steam which is used for manufacture of various final products 2002 (150) ELT 650 (T) - UNITED PHOSPHORC 2000 (119) ELT 611 (T) - GLOBAL SUGAR LT: 2003 (54) RLT 544 '"' (NET ISPAT LTD.Used for running various motors required for manufacture of fina products.

2001 (133!) ELT 90 (T) - OSWAL FATS & OILS 2002 (51) RLT 458 (T) - DALMIA CEMENTS 2000 (116) ELT 461 (T) - PUBJAB CHEM * PHARM Unbrako Alien Key, Socket Head, Caps Screw, Socket Set, Screw, Hex Socket Alien Screw Used for fitting & installing various machines required for manufacture of final products.

1997 (95) ELT 655 (T) - CENTURY CEMENTS 2001 (130) ELT 903 (T) - ISPAT ALLOYS 2002 (51) RLT 49 (T) - MAX G.B.LTD.Ultrasonic Cleaner Is, ideally suited for this precision work, which cleans the spinnerets thoroughly without Inflicting any damage to the diameter of the orifices E/536/2000-Mum NRC LTD VS CCE MODVAT RS.1,57,979/-sr.nO.34(SICK) Unbrako Socket, Alien Cap Screw, Set Screw, Grab Screw, Alien Key, Cap Screw, Socket Set Screw Used in fitting & Installing various machines required for manufacture of final products.

1997 (95) ELT 655 (T) - CENTURY CEMENTS 2001 (130) ELT 903 (T) - ISPAT ALLOYS 2002 (51) RLT 49 (T) - MAX Q.B.LTD.Rods are used for welding pipe lines, machine parts, tanks etc. which are use for manufacture of Rayon Yarn, Nylon Yarn, and Chemicals.

1999 (105) ELT 124 (T) - MEWAR SUGAR MIL 1999 (111) ELT 608 (T) - K.L.

STEEL LTD. 1999 (108) ELT 47 (T) - JAWAHAR M-ILLS Used for regulating the speed of pump through which viscose is pumped as per process requirement for manufacture of Rayon Yarn.

1997 (23) RLT 306 (T) - MAIHAR CEMENT 2002 (53) HLT 294 (T) - MAWANA SUGAR 2002 (53) RLT 304 (T) - JINDAL STRIPS 1999 (105) ELT 124 (T) -.MEWAR SUGAR Used for commutation of silicon control rectifier through which electrical supply 1e given to pot motors where rayon yarn 1s wound.

1998 (98) ELT 156 (T) - VIVEK ALLOYS LT 2003 (156) ELT 918 (T) - JINDAL STRIPS 2002 (51) RLT 951 (T) - CHEMPLAST INDIA 2002 (49) RLT 813 (T) - SAMCOR GLASS Used for fitting various machines falling under Chapter Heading 8445/ 8479 used for manufacture of finala product Hayon Yarn, Nylon Yarn and various chemicals.

2000 (116) ELT 528 (T) - VINDHYA TELELIN 2000 (118) ELT 608 (T) - SEARCH CHEM INC 1999 (114) ELT 347 (T) - VINDHYA TELELIN 2000 (118) ELT 196 (T) - DHIR CEMENTS Used for carrying sulphuric acid to the spinning machine for manufacture of Rayon Yarn.

2002 (51) RLT 1075 (T) - CHEMPLAST INDIA 1998 (102) ELT 488 (T) - J .

K.PH ARMAGH EM Used for running various motors required for manufacture of final products.

2001 (133) ELT 90 (T) - OSWAL FATS & OILS 2002 (51) RLT 458 (T) - OALMIA CEMENTS 2000 (116) ELT 461 (T) - PUBJAB CHEM i PHAF Fuse Fitting & also with HRC Fuse, CFS with HRC F/L, NBC * HBC Fuse Link, Conductors Do! Starter, also Fuse Board W/o Indicator Fuse Link Used for giving electrical supply to the Rayon spinning machine falling under CSH 8445 where Rayon filament are formed.

1997 (95) ELT 301 (T) - KANORIA CHEMICALS 2002 (149) ELT 1291 (T) - STEEL STRIPS LTD. 2001 (137) ELT 1159 (T) - JINDAL STRIPS LTC 1998 (101) ELT 422 (T) - BHUSHAN STEELS Used for operating solenoid Valves in bleaching process. These valves are used for supplying oil to bleaching machine falling under CSH 8481 where cakes are bleached.

2002 (143) ELT 503 ( P*H ) - S. B. PACKAGING 2002 (51) ELT 837 (T) - SHASUN CHEMICALS Used for making holes to plates, shafts etc. which are in the 1o nature of dril bite These are fitted 1n plug valves. . These valves are fitted on various pipe lines in manufacturing process This is a part of Bleaching dryer. Dryer is used for drying the Rayon cakes.

is held to be admissible except on items Safety Shower and HSS Parallel Shank Jobber Series Twist Drills.

4. Since the credit is found to be eligible on almost the entire disputed items no penalty is found to be eligible to be imposed on the appellants since the issue of eligibility of capital goods credit was itself in doubt. Besides, a very small amount is been denied. Appeals allowed as per findings herein above i.e. penalty set aside and credit of all items except the items Safety Shower and HSS Parallel Shank Jobber Series Twist Drills.