JUDGMENT
S.L. Peeran, Member (J)
1. The Hon’ble High Court of Judicature at Madras by their order dated 12.9.2000 have directed the Tribunal to draw a statement of the case and remit the same together with documents relevant for the purpose of deciding the following question:
“Whether the Tribunal, in the circumstances was right in holding that the assessee is entitled to the benefit of Notification No. 16/94, despite credit having been taken after30th June 1994 the last date specified in that Notification.”
2. Revenue has filed a set of documents relevant for the purpose of deciding the question and in terms of the same, the following statement of facts is drawn up:
STATEMENT OF FACTS
3. The respondent-assessee are manufacturers of Viscose Staple Fibre, Viscose Filament Yarn and had been availing credit of duty on capital goods under Rule 57Q of Central Excise Rules, 1944. Revenue initiated proceedings against the respondent-assessee on the allegation that they had availed modvat credit on capital goods to the tune of Rs. 3,69,580 during the period from 1.10.94 to 31.12.94 on Measuring instruments and Controlling equipments which are not covered under Rule 57Q of CE Rules, 1944 since they were used only to measure the level, flow, pressure, temperature concentration and other variable liquid, gases etc., the function of these instruments does not contribute in bringing about any change in the processing material for the manufacture of final products, and hence they are not covered under Clause (a) (b) (c) of the explanation to Rule 570(1). The second allegation charged on the assessee was that they had availed modvat credit on some of the capital goods based on the invoices raised on the assessee which were neither endorsed nor was there any evidence that the goods had actually been supplied to the assessee. In addition to this, the assessee were also alleged for not having followed the procedure proscribed under Notfn. No. 33/94 (NT) dated 4.7.94. Hence, the adjudicating authority i.e. the Asst. Commissioner of Central Excise confirmed the demands as proposed in the show cause notice vide Order-in-Original No. 224/95 dated 17.11.95, including imposition of penalty under Rule 173Q of CE Rules.
4. Aggrieved by the order of the AC, the assessee filed an appeal before the Commissioner (Appeals) who vide Order-in-Appeal No. 489/97 (CBE) dated 21 /11 /97 held as under and set aside the Order-in-original passed by the ACCE.
“I have carefully considered the facts of the case and the submissions of the appellants. I have been consistently holding that after amendments made to proviso to Rule 57S, the concept of capital goods has been enlarged so as to include capital goods used for in relation to the manufacture of final products. The expression ‘used in relation to has been held to have wider scope by the Apex Court. In the light of the above, I hold that the measuring instruments and controlling equipments are accessories/components/equipments to the machineries used in or in relation to the manufacture of the final products and direct the Assistant Commissioner to extend the capital goods credit for the same. As for the maintenance of RG 23C Part I account, I accept the explanation of the appellants in the instant case. However, they are directed to adhere to the accounting procedures as per law. I also hold that the appellants are eligible for the credit taken on the invoices addressed to the corporate office inasmuch as there are several decisions allowing modvat credit in such cases. Since the modvat disputes are on account of interpretations, the imposition of penalty is set aside,”
5. The department preferred an appeal before CEGAT against the said Order-in-Appeal and the Tribunal by its final order No. 155/2000 dated 24.1.2000 rejected the appeal of the Revenue on the ground that the issue remains decided in favour of the assessee in view of Tribunal’s Ref. Order No. 115/99 dt. 15.10.99 and final order No. 1361/98 dt. 21.9.98 in assessee’s own case.
6. Now, the respondent-assessee have moved the Hon’ble High Court of Judicature at Madras for determination of the issue in their favour. The Hon’ble High Court by their order dated 12.9.2000 in R.C.P. No. 8 of 1999 have directed the Tribunal to draw a statement of the case to determine the question framed by the High Court as noted above.
7. In view of Hon’ble High Court’s direction, the registry is directed to remit the records and statement drawn alongwith the paper book (in four sets) to the Registrar of the Hon’ble High Court for placing it before the appropriate Bench for answering the reference. Ordered accordingly.
