# MIS. SARVESH REFRACTORIES (P) LTD v. COMMISSIONER OF CENTRAL EXCISE & CUSTOMS

- **Citation:** [2007] 12 S.C.R. 444
- **Court:** Supreme Court of India
- **Decided:** 2007-11-22
- **Case number:** CIVIL APPELLAT': JURISDICTION: Civil Appeal No. 1824 of 2002
- **Bench:** Ashok Bhan, V.S. Sirpurkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/mis-sarvesh-refractories-p-ltd-v-commissioner-of-central-excise-customs-22360
- **Pages:** 3

## Headnote

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
t
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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.
c
V. Shekhar, P. Narsimhan, Pradeep K. Dubey and Abhigya (for B. V.
Balaram Das) for the Respondent.

## Text

A
B
c
D
E
F
G
H
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
t
""--
~
,).
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.
c
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').
E
F
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
t
446
SUPREME COURT REPORTS
[2007] 12 S.C.R.
. '
equipment would properly fall under Heading 84.27 and not under Heading
--,.._
A
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.
B
5. Revenue, being aggrieved, filed an appeal before the Tribunal
;
which was accepted by setting aside the order of the Commissioner
)-
(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 consumer of those goods, could not get the
classification of the manufacturer changed from 84.29 to 84.27.
6. The finding recorded by the Tribunal is unexceptionable. We agree
with the view taken by the Tribunal that the appellant could not get the
D classification of 'Loadall' changed to Heading 84.27 from 84.29, as
declared by the manufacturer. Insofar as the penalty imposed by the
A
authority-in-original is concerned, we are of the view that a case for
imposition of penalty is not made out and accordingly the same is set aside
and deleted. Rest of the order of the Tribunal restoring the order of the
E authority-in-original is continued.
7. Counsel for the appellant has raised an alternate argument on the
interpretation of Rule 57Q of the Rules which had not been raised either
in reply to the show cause notice or before any of the authorities below.
F Under the circumstances, we do not permit the appellant to raise this
alternate submission.
A8. The appeal is disposed of accordingly with no order as to costs.
K.K.T.
Appeal disposed of.
>-,
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