ORDER
1. This reference application has been filed under Section 35G(3) of the Central Excise Act, 1944 (for short, “the Act”). According to the Department, the following question of law arises out of the order passed by the Customs, Excise and Gold (Control) Appellate Tribunal, Chennai (CEGAT); which requires to be considered by this Court.-
“1. Whether the Hon’ble Tribunal was correct in extending the benefit of capital goods to “electric cables” under Rule 57-Q of the Central Excise Rules, 1944 when are not used in the manufacture of final products?”
2. The assessee, M/s. Lamina Foundries Limited, was engaged in the manufacture of excisable goods, during the period October 1994 to January 1995. It had availed the MODVAT credit of Rs. 1,01,1017- on electrical cables which were used for their manufacturing purposes. The assessee claimed the said MODVAT benefits under Rule 57-Q of the Central Excise Rules.
3. Rule 57-Q reads as under:
“57-Q. Applicability.–(1) the provisions of this section shall apply to finished excisable goods of the description specified in the annexure below (hereinafter referred to as the “final products”) for the purpose of allowing credit of specified duty paid on the capital goods used by the manufacturer in his factory and for utilising their credit so allowed towards payment of duty of excise leviable on the final products, or as the case may be, on such capital goods, if such capital goods have been permitted to be cleared under Rule 57-S, subject to the provisions of this section and the conditions and restrictions as the Central Government may specify in this behalf:
Provided that credit of specified duty in respect of any capital goods produced or manufactured-
(a) in a free trade zone and used for the manufacture of final product in any other place in India; or (b) by a hundred per cent export oriented undertaking or by a unit in an Electronic Hardware Technology Park and used for the manufacturer of final product in any place in India,
shall be restricted to the extent of duty which is equal to the additional duty leviable on like goods under Section 3 of the Customs Tariff Act, 1975 (51 of 1975) equivalent to the duty of excise paid on such capital goods.
Explanation.--For the purposes of this section.--(1) "Capital Goods" means.- (a) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products; (b) components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose; and (c) moulds and dies, generating sets and weighbridges used in the factory of the manufacturer. (2) "Specified duty" means duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975)".
3-A. The question that has been sought to be raised is that the electric cables used by the assessee for its foundry was not capital goods as defined under the above rule since it is not a “plant”.
4. In our considered opinion, the question raised is no more res Integra since it has been specifically answered by the Supreme Court in the case of Scientific Engineering House Private Limited v Commissioner of Income-tax, Andhra Pradesh, in paragraph 11 whereof, it has been held:
“. . . The classic definition of ‘plant’ was given by Lindley, L. J. in Yarmouth v France , a case in which it was decided that a cart-horse was plant within the meaning of Section 1(1) of the Employers’ Liability Act, 1880. The relevant passage occurring at page 658 of the Report runs thus.-
“There is no definition of plant in the Act: but, in its ordinary sense, it includes whatever apparatus is used by a businessman for carrying on his business-not his stock-in-trade which he buys or makes for sale; but all goods and chattels, fixed or movable, live or dead, which he keeps for permanent employment in his business”.
In other words, plant would include any article or object fixed or movable, live or dead, used by businessman for carrying on his business and it is not necessarily confined to an apparatus which is used for mechanical operations or processes or is employed in mechanical or industrial business. In order to qualify as plant the article must have some degree of durability, as for instance, in Hinton (Inspector of Taxes) v Maden and Ireland Limited , knives and lasts having an average life of three years used in manufacturing shoes were held to be plant. In The Commissioner of Income-tax. Andhra Pradesh v M/s. Taj Mahal. Hotel, Secunderabad , the respondent, which ran a hotel, installed sanitary and pipeline fittings in one of its branches in respect
whereof it claimed development rebate and the question was whether the sanitary and pipeline fittings installed fell within the definition of plant given in Section 10(5) of the 1922 Act which was similar to the definition given in Section 43(3) of the 1961 Act and this Court after approving the definition of plant given by Lindley L.J. in Yarmouth’s case, supra, as expounded in Jarrold v John Good and Sons Limited , held that sanitary and pipeline fittings fell within the definition of plant”.
5. In our opinion, the issue sought to be raised above is squarely covered by the above judgment though rendered in the context of the provisions contained in the Income-tax Act. Electric cables which have been used by the assessee in the present case were certainly meant for carrying on its business and was sufficiently durable. As such, it was certainly a ‘plant’ within the meaning of Rule 57-Q of the Rules.
6. In the above view of the matter, the question sought to be raised is
purely academic for this Court. Therefore, do not feel it necessary to call
for any statement of the case The reference application is accordingly
rejected..