ORDER
P.C. Jain, Member (T)
1. In this bunch of three cases, the appellants herein in two cases claimed the benefit of Modvat credit of duty paid on welding rods and lubricating oil as inputs under Rule 57A. In one of the appeals however, they claimed the Modvat credit on the aforesaid two commodities as capital goods under Rule 57Q. The original authority rejected the first two cases on the ground that these commodities are meant for repair and maintenance of machinery and therefore got excluded from the category of inputs by the exclusion clause in the explanation to Rule 57A. The same reasoning was also applied in rejecting the cases of the appellants by the original authority in respect of their claim for Modvat credit on the aforesaid goods as capital goods.
2. On appeal before the lower appellate authority, the said authority rejected the first two cases of the appellants on the ground that they have claimed the Modvat credit as capital goods whereas he has held relying on decisions of the Tribunal mentioned in the impugned order that they are inputs and entitled to Modvat credit. Lower appellate authority however, rejected the claim in the two cases on the ground that the appellants have claimed the Modvat credit as capital goods. At this stage, ld. Advocate for the appellants submit that this is a factual mistake committed by the lower authority. Their claim was for Modvat credit as inputs and not as capital goods. Third case was also rejected because the lower appellate authority held that these are inputs and not capital goods, and hence the claim of the appellants for Modvat credit as capital goods was not valid. Hence, these three appeals by the appellant before the Tribunal.
3. Heard both the sides. Ld. Advocate has submitted that the lower appellate authority has held that the aforesaid goods are entitled to the Modvat credit as inputs under Rule 57A in all the three cases. This finding of the lower appellate authority has not been challenged by the revenue. He therefore, submits that the Modvat credit should be allowed to the appellants by virtue of this finding of the lower appellate authority and the lower appellate authority should not have rejected the claim of the appellants on the ground that the claim has been made as capital goods. A mere wrong mentioning of a Rule, he submits, cannot deprive the appellants of the benefit of Modvat credit. He, therefore, prays for allowing the three appeals with consequential relief to the appellants.
4. Opposing the contentions ld. JDR Shri A.M. Tilak for the revenue submits that the lower appellate authority has committed an error in passing the order by proceeding on the premise that a common issue is involved in these three appeals namely denial of Modvat credit on welding rods and lubricants by the Asstt. Commissioner. This is an error submits the ld. JDR inasmuch as the show cause notice issued to the appellants by the revenue was denial of Modvat credit on the aforesaid two products as inputs in two cases and denial of Modvat credit in the third case as capital goods. Therefore, he submits that the Commissioner (A) should not have clubbed all the three cases. He therefore, prays for remanding the matter to the lower appellate authority for deciding the cases separately on the basis of the allegations made in the show cause notice and the findings of the adjudicating authority.
He also submits that the issue relating to admissibility of Modvat credit on lubricants is pending before Larger Bench vis-a-vis Rule 57A.
5. I have carefully considered the pleas advanced from both the sides. I am impressed by the plea of the ld. Advocate for the appellants that a very categorical finding has been given by the lower appellate authority that Modvat credit is admissible on both the products involved herein namely ‘welding rods’ and ‘lubricant’ under Rule 57A and that the revenue has not challenged this finding by filing an appeal. Therefore, his further submission is a logical corollary of this finding that the Commissioner (A) should have given the relief on his own finding that they are entitled to the Modvat credit under Rule 57A and that the credit should not have been denied merely on the ground that the appellants have claimed the Modvat credit under Rule 57Q. On this short ground alone I allow the appeals with consequential relief to the appellant.
Before parting with this order, I also observe as rightly pointed out by the ld. Advocate for the appellants that the Commissioner (A) has committed an error by making a presumption that the appellants have claimed the Modvat credit under Rule 57Q in two of the three cases before me. I have gone through the show cause notice and I find that they had claimed the Modvat credit under Rule 57A and it was this claim which was proposed to be denied to the appellants by issue of the proper show cause notice. Therefore, the presumption by the Commissioner (A) in two of the three cases is basically wrong. Appeals disposed of in the above manner.