ORDER
Jyoti Balasundaram, Member (J)
1. Vide the impugned order, the Commissioner of Central Excise has disallowed modvat credit of Rs. 30,97,244/- under Rule 57U of the Central Excise Rules on the following item’s:-
(1) Storage tanks and pumps;
(2) Cleaning system and parts thereof;
(3) Compressors and parts thereof which are parts of chilling system;
(4) Centrifugal fans, driers, filter frames; and
(5) Electrical accessories such as control panels, switches, extension cables, circuit breakers etc.
2. We have heard both sides. Our findings are recorded below:-
(1) Storage tanks and pumps:- These are used at different stages of the process of manufacture of aerated water to store and hold sugar syrup etc., and also to store liquid carbon dioxide which is an essential ingredient required to carbonate beverages. In the light of the Tribunal’s decisions in the case of STS Chemicals Ltd v. CCE 2001 (132) ELT 704, Varalakshmi Sugars Ltd. v. CCE 2001 (137) ELT 96 and Rosa Sugar Works 2001 (131) ELT 89, credit is admissible on these items.
(2) Cleaning system and parts thereof:- These consist of CIP tank, stainless steel platforms for tank, CIP supply and return pumps, CIP temperature control system with pneumatic piping control system, lye tank, hot water tank, control panel etc. Raw syrup room, ready syrup room and filter room are connected to clean in place (CIP room by stainless steel pipelines and valves for control. The entire system has to be washed and sanitised by CIP system using hot water and caustic lye etc. after each operation. From the use of the goods as set out above, it is clear that they are covered by the definition of capital goods as they are goods for producing or processing of any goods or bringing about any change in any substance. We therefore hold that credit is admissible on the above items.
(3) Compressors and parts thereof:- These are not eligible to credit, as they are parts of chilling system and hence excluded from the coverage of capital goods as per Clause (d) Rule 57Q(1) of the Central Excise Rules, as it stood during the relevant period which is subsequent to 16.3.1995 – the clause excludes compressors of a kind used for refrigerating and air-conditioning applications and the goods in dispute are for refrigerating applications – in the light of the ratio of the Tribunal’s orders in Twiga Fibre Glass Ltd. v. CCE, Meerut 1999 (109) ELT 659 and Pesticides India v. CCE, New Delhi 2000 (115) ELT 696. The decision in the case of Krishna Mohan Beverages & Construction Ltd. v. CCE, Visakhapatnam 2003 (159) ELT 397 relied upon by the appellants, wherein the Tribunal has extended capital goods credit on compressors and parts of refrigeration system, is not followed by us as it appears that the specific exclusion in Rule 57Q(1)(d) to compressors and parts thereof used for refrigerating and air-conditioning applications was not brought to the notice of the bench.
(4) Centrifugal fans, driers, filter frames:- These items which are used to remove the specific odours of aerated beverages, are eligible to credit in the light of the Tribunal’s order in Abilities India Pistons and Rings Ltd. v. CCE, Meerut 2000 (120) ELT 385.
(5) Control panels, switches, extension cables, circuit breakers etc.:- These are electrical accessories without which the plant and system cannot work and are entitled to capital goods credit in the light of the Tribunal’s decisions in Jawahar Mills Ltd. v. CCE 1999 (108) ELT 47, Vallabh Steels Ltd v. CCE, Chandigarh 2001 (138) ELT 313 and Jindal Strips Ltd. v. CCE 2001 (136) ELT 1085.
3. In the result, we hold that items at sr. Nos. 1, 2, 4 & 5 above are capital goods within the meaning of Rule 57Q of the Central Excise Rules and hence eligible to credit while item at sr. No. 3 above is not entitled to capital goods credit.
4. The appeal is thus partly allowed as above.
(Operative part pronounced in court)