ORDER
S.S. Kang, Vice-President
1. Heard both sides.
2. Appellant filled this appeal against the order passed by the Commissioner (Appeals) whereby the benefit of Modvat credit in respect of storage tanks was disallowed on the ground that storage tanks are merely used for the purpose of storage of gases manufactured by the appellant.
3. The appellants are engaged in the manufacture of various types of gases and they are availing the benefit of Modvat credit in respect of capital goods. The appellant availing the credit in respect of storage tanks as capital goods and the credit was denied.
4. The contention of the appellant is that without the tanks it is not possible to store the finished goods manufactured by the appellant. These storage tanks are specially designed tanks in which the gases manufactured by them are stored. The appellant relied upon the decision of the Tribunal in the case of CCE, Belgaum v. Industrial Oxygen Co. Ltd. reported in 2004 (64) RLT 485 : 2003 (107) ECR 60 (T) to submit that the Tribunal held that storage tanks are used as an equipment for processing the manufactured gas and also an accessory to the oxygen-nitrogen plant.
5. The contention of the Revenue is that the storage tanks are classified under Chapter 73 and during the period in dispute the goods falling under heading 73 are not covered the definition of capital goods. The appellant also relied upon the decision of the Tribunal in the case of CCE, Jaipur v. Guljag Industries Ltd. and in the case of Parle Biscuits Ltd. v. CCE, Jaipur to submit that the storage tanks are not entitled for the benefit of Modvat credit as capital goods.
6. We find that in this case the appellants are engaged in the manufacture of industrial gases and tanks in question are used fro storage of the gages. We find that the Tribunal in the case of Parle Biscuits Ltd., relied upon by the Revenue disallowed the credit in respect of the tanks, which are used by the biscuit manufacturer without considering the provision provided at serial No. 5 of table under Rule 57Q of the Central Excise Rules.
7. In the case of Guljag Industries Ltd. (supra) the tanks in question were used for storage of the inputs. The facts of the present case are different. The Tribunal after considering the provision of Rule 57Q of Central Excise Rules in respect of storage tanks which are used for the storage of gases allowed the benefit of Modvat credit in the case of CCE v. Industrial Oxygen Co. Ltd. (supra).
8. We find that industrial gases are stored in the specially designed tanks to prevent evaporation and leakages. These storage tanks are essential for storage of the industrial gases. In these circumstances, as serial No. 5 of table under Rule 57Q of Rules the accessory/component of the plant are entitled for credit therefore, the impugned order is set aside and the appeal is allowed.
(Pronounced and dictated in the open Court).