Judgment

Ashok Bhan, J. —

1.Being aggrieved by the order dated 10th 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 M/s. Escorts JCB Ltd. The cose 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 570 of the Central Excise Rules, 1944 (for short, ‘the Rules’).

3.Since the said item had been classified by M/s. 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 MODVAT credit to the appellant by observing that the said Heading 84.29 has been specifically ousted from the definition of “capital goods” under Rule 570 of the Rules. The Dy. Commissioner also imposed a penalty of Rs. 50,000/- under Rule 1730(bb) of the Rules.

4.On appeal filed by the appellant, the Commissioner (Appeals) observed that ‘Loadall’ being an improvised ve