M/S. SARVESH REFRACTORIES (P) LTD. versus COMMISSIONER OF CENTRAL EXCISE & CUSTOMS

Citation: [2007] 12 S.C.R. 444 · Decided: 22-11-2007 · Supreme Court of India · Bench: ASHOK BHAN · Disposal: Disposed off
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Judgment (excerpt)

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MIS. SARVESH REFRACTORIES (P) LTD. 
v. 
COMMISSIONER OF CENTRAL EXCISE & CUSTOMS 
NOVEMBER 22, 2007 
(ASHOK BHAN AND V.S. SIRPURKAR, JJ.] 
Central Excise Rules, 1944-r. 570 and 17 30 (bb)-Purchase of 
'Loadall' by assessee from manufacturer/supplier-Manufacturer 
paying the duty under heading 84.29-Claim of MOD VAT credit by 
assessee classifj;ing the item under heading 84.27-Revenue denying 
the credit and imposing penalty-Held: Assessee not entitled to 
MOD VAT credit-He, as a consumer, could not get the classification 
of the item changed to heading 84.27 from 84.29 as declared by the 
manufacturer-Central Excise Tariff Act, 1985-Tariffheading84.27. 
Appellant-assessee purchased 'Loadall' from its manufacturer/ 
supplier. The cost element of the good included excise duty. Assessee 
claimed M ODV AT credit in respect of the said item under Rule 570 of 
the Central Excise Rules, 1944. The authority disallowed the same on 
the ground thatthe manufacturer had paid duty on the item, classifying 
the same under Heading 84.29 and Rule 570 was not applicable to that 
Heading. The authority also imposed penalty under Rule 1730 (bb). In 
appeal, appellant-assessee was held to be entitled to the MODV AT 
credit. Tribunal denied the same, holding that the item having been 
classified by the manufacturer under Heading 84.29, the assessee, as 
a consumer could not get the classification changed to 84.27. Hence the 
present appeal. 
Disposing of the appeal, the Court 
HELD: Appellant could not get the classification of 'Loadall' 
changed to Heading 84.27 from 84.29 as declared by the manufacturer. 
Insofar as the penalty imposed by the authority-in-original is concerned, 
444 
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M/S. SARVESH REFRACTORIES (P) LTD. v. COMMNR. 445 
OF CENTRAL EXCISE & CUSTOMS [BHAN, J.] 
a case for imposition of penalty is not made out and accordingly the same A 
is set aside and deleted. [Para 6] [446-C, DJ 
CIVIL APPELLAT': JURISDICTION: Civil Appeal No. 1824 of 
2002. 
From the Judgment and final Order No. A-860-KOL/2001 dated B 
10.9.2001 of the Customs Excise·& Gold (Control) Appellate Tribunal 
Eastern Bench, Kolkata in Appeal No. E/294/2001. 
Rajesh Kumar, Rajiv Roy, A.C. Pradhan and S.K. Patri (for Praaab 
Kumar Mullick) for the Appellant. 
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V. Shekhar, P. Narsimhan, Pradeep K. Dubey and Abhigya (for B. V. 
Balaram Das) for the Respondent. 
The Judgment of the Court was delivered by 
ASHOK BHAN, J. 1. Being aggrieved by the order dated 10th D 
September 2001 passed by the Customs, Excise & Gold (Control) 
Appellate Tribunal (Now known as Customs, Excise & Service Tax 
Appellate Tribunal) [for short 'the Tribunal] in Appeal No.E-294/2001, 
the assessee-appellant has filed the present appeal. 
2. The appellant purchased 'Loadall' from Mis. Escorts JCB Ltd. 
The cost element of the 'Loadall' included excise duty to the tune of 
Rs.1,79,328/-. The appellant claimed MODVAT credit in respect of the 
said item under Rule 57Q of the Central Excise Rules, 1944 (for short, 
'the Rules'). 
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3. Since the said item had been classified by Mis. Escorts JCB Ltd., 
the manufacturer and supplier, under Heading 84.29 and had paid duty 
under the said heading, the authority-in-original, viz., Dy. Commissioner 
disallowed the MODY AT credit to the appellant by observing that the 
said Heading 84.29 has been specifically ousted from the definition of G 
"capital goods" under Rule 57Q of the Rules. The Dy. Commissioner also 
imposed a penalty ofRs.50,000/- under Rule l 73Q(bb) of the Rules. 
4. On appeal filed by the appellant, the Commissioner (Appeals) 
observed that 'Loadall' being an improvised version of material handling H 
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SUPREME COURT REPORTS 
[2007] 12 S.C.R. 
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equipment would properly fall under Heading 84.27 and not under Heading 
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84.29. It was further observed that forklift truck or crane or similar material 
handling equipments have been held to be eligible capital goods. On this 
finding, the Commissioner (Appeals) held that the appellant would be 
entitled to claim MODV AT credit. 
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5. Revenue, being aggrieved, filed an appeal before the Tribunal 
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which was accepted by setting aside the order of the Commissioner 
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(Appeals) and restoring that of the authority-in-original. It was held that 
the 'Loadall' having been classified by the Central Excise Officer having 
c jurisdiction over the manufacturer's factory as falling under Heading 84.29, 
the appellant, who is the consum
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