ORDER
G.R. Sharma, Member (T)
1. The Revenue has come up in appeal against the order of the Commissioner (Appeals) in which he had allowed Modvat credit as capital goods on black steel tubes and aluminium rolled sheets.
2. Briefly stated, the appellants are engaged in the manufacture of cement and are availing Modvat credit on capital goods. They claimed Modvat credit on black steel tubes and aluminium rolled sheets. The Assistant Collector adjudicating the case did not allow Modvat credit on these items. On appeal, however, learned Commissioner (Appeals) allowed Modvat credit relying upon the decision of the Hon’ble Supreme Court in the case of J.K. Cotton Spinning and Weaving Mills Ltd. reported in 1997 (91) E.L.T. 34 (S.C.) as also on the decision of this Tribunal in the case of Malvika Steels Ltd. reported in 1998 (97) E.L.T. 530.
2. Arguing the appeal, Shri Mewa Singh, learned SDR submits that black steel tubes and aluminium rolled sheets are general utility items as they were required only for carrying cool water for cooling critical parts which became hot during the process of manufacture. He submitted that there was no nexus between the black steel tubes or aluminium rolled sheets and the finished product. He submitted that since these two items had no nexus; that they were used in the manufacture or for bringing about any change in the final product, therefore, they were not capital goods for the purpose of Rule 57Q. He, therefore, submitted that the appeal may be allowed.
3. Shri K.K. Anand, learned Counsel appearing for the respondents submits that black steel tubes are used for controlling temperature of the parts of the machines used in their plant. He submits that there are a number of decisions of this Tribunal wherein it has been held that steel tubes used for carrying treated water are admissible to credit of duty under the Modvat scheme. In support of this contention he cites the decision of this Tribunal in the case of Collector of Central Excise v. Hotline Glass reported in 1999 (33) R.L.T. 530. He submits that in so far as aluminium rolled sheets are concerned, they are used as material for insulating the electro static precipitators. He submits that the aluminium rolled sheets are material for manufacture of these precipitators and, therefore, both black steel tubes and aluminium rolled sheets have been held as capital goods for the purpose of Rule 57Q. He, therefore, submits that the case is fully covered in their favour and prays that the appeal may be rejected.
4. We have heard the rival submissions. We find that the black steel tubes are used for carrying cool water for cooling critical parts in the plant. Thus they participate in the process of manufacture as has been held by the Tribunal in the decision cited and relied upon by the respondents. We, therefore, hold that black steel tubes will be entitled to credit of duty under the Modvat scheme as capital goods.
5. In so far as aluminium rolled sheets are concerned, we note that they are used as insulating material in the electro static precipitators. The Tribunal has already held that electro static precipitators are capital goods. We find that aluminium rolled sheets are used for insulating them. Thus they became a part of the capital goods. Following the ratio of the decision of this Tribunal in the case cited above, we hold that Modvat credit will be admissible on black steel tubes and aluminium rolled sheets. The appeal is, therefore, rejected.