ORDER
V.K. Ashtana, Member (T)
1. By this COD application, the appellants are seeking condonation of delay of seven days in filing the appeal.
2. The learned Chartered Accountant explains that the impugned order was posted to the manufacturing unit of the appellants and taxation matters and legal matters pertaining there to are dealt with in the Corporate Office which is situated elsewhere. Seven days delay has occurred in view of the papers having been transferred from the factory unit to the Corporate Office. He submits that the short delay may be condoned.
3. On the question of availability of Modvat credit on the battery assembly for the PLC unit he submits that while no detailed reasoning is given in the order impugned to deny the credit, the matter is clearly covered by Circular No. 276/110/96-TRU, dated 2-12-1996. Regarding the scope of the clause (d) of Rule 57Q(1) and explanation thereto, as it then existed during the period of dispute which is from 1-4-1995 to 31-8-1995, the above circular holds that the position under Rule 57Q even prior to 23-7-1996 was that Modvat credit was available on components, spares and accessories of the specified capital goods irrespective of their classification as clause (d) covers goods by their description and not by any classification.
4. The learned DR reiterates the order impugned.
5. I have carefully considered the submissions and the records of the case. Since the delay of seven days has been satisfactorily explained and the delay is short, therefore interests of justice require that the substantive right of appeal is not denied to them by this delay. Therefore the delay is condoned.
6. On consideration of the merits of the case, I find that during the relevant period of dispute noted above, clause (d) of Explanation to Rule 57Q(1) was covering all the components accessories and spare parts of capital goods which were specified as eligible under Rule 57Q. This position also has been clarified by the above noted Circular of the Board which was binding on the authorities. Therefore, since the lower authorities have already allowed Modvat credit on the PLC Unit as capital goods under Rule 57Q for components, accessories and spares, irrespective of the heading under which it would be classified, would be eligible for Modvat credit in view of the explanation under clause (d) ibid. As against this the order impugned does not state any reason and it does not contain any discussion how Modvat credit is deniable in view of the fact that battery assembly is clearly designed to be suitable only for use with PLC unit. In fact this has been admitted by the authorities below in the order in original attendant to the order impugned. Since this fact is not disputed, the nature of the battery assembly, at the worst position imaginable, becomes accessories of capital goods i.e. PLC Unit. Since accessories of capital goods classifiable under Rule 57Q are eligible to Modvat credit as discussed above, the appellants are entitled to Modvat credit on the said battery assembly being only used with PLC Unit on which credit under Rule 57Q is allowed.
7. In view of the above analysis, the order impugned along with the attendant order in original are set aside and the appeal allowed with consequential relief as per law.
