ORDER
K.K. Agarwal, Member (T)
1. The appellants in this case have been denied Modvat credit on split air-conditioners, fluidic finish kit, lamps, saipper pads as capital goods on the ground that they cannot be considered as part cum-components and accessories of capital goods.
2. The learned Advocate for the appellants submits that the air-conditioner is used in the furnace control room which is attached to the furnace itself. The furnace is where the glass in molten form is made before being released to mould Section for making glass bottle. The air-conditioner keeps the furnace control room cool at the required temperature so that the same can function properly. If the air-conditioner is not attached to the furnace control room, furnace control room will be get heated up as the furnace is having its temperature between 2000-2500° C. In the absence of furnace control room it will not be possible to measure the temperature nor functions of furnace of releasing molten glass to the mould Section could be controlled. In view of this, the air-conditioner was an essential component and accessory of the furnace and therefore Modvat credit cannot be denied. It was submitted that the Commissioner (Appeals) has denied the Modvat credit on the air-conditioners on the ground that the air-conditioners are excluded from the purview of capital goods as they fall under Heading No. 84.15 and that they are required in the control room for keeping the furnace control room cool at the required temperature and therefore it cannot be said to be used for controlling surrounding temperature with a view to manufacture final products. It was further observed by the Commissioner (Appeals) that the PLC system established in the control room operates between 0-60 degree centigrade and it shows that the PLC system is very much capable of functioning under high temperature and the air-conditioner is basically for secondary utility. It was submitted that the findings are wrong because the furnace temperature outside is 2000 – 2500 degree centigrade and to bring the temperature between 0 -60 degree centigrade the air-conditioners are needed and therefore it is an essential accessory. He cited the CEGAT Order in the case of Lupin Laboratories Limited v. Commissioner of Central Excise and Customs, Indore and Commissioner of Central Excise, Jaipur v. Sunil Synchem Ltd in support thereof.
3. As regards fluidic finish kit, it was submitted that Commissioner (Appeals) has denied the Modvat credit on the ground that it is not part of the plant and its specific use has not been indicated. It was submitted that this kit was imported along with plant as a part of it and it is required for the inspection of bottles. One of the method is to pass the air through the bottle to find out leakage in the bottle. The cylinder repair kit is used for generating air pressure which helps in inspection of the bottle. Similarly, lamps are used to indicate different function while running the machine, without these indication it cannot be recognized as to what operation is going on and hence machine cannot perform without these bulbs. Similarly, for saipper pads, it was submitted that without them the stock of bottles will proceed further and likely to fall further. This part is used in duel head gauge stock assembly of unit to restrict for stock of gauge carriage and therefore since all of them are used in relation to manufacture the credit should be allowed.
4. The learned SDR, however, submits that air-conditioner is not required for furnace control as the appellant’s factory was working since its inception in the year 1997 when there was no such air-conditioner which was installed in the year 1998 only and therefore it cannot be said that the furnace cannot function without split-AC. He also invited reference, to the case of Gujarat Glass Ltd. v. Commissioner of Central Excise, Vadodara on the same issue in the appellant’s own case where Modvat credit on split air-conditioner has been denied as it was not consifepef essentkan part or accessor{ mf ekther thg furncce or PLC system installed in the control room.
5. I have considered the submissions. I find that Modvat credit on split air conditioner has already been denied by the CEGAT in the appellant’s own case reported at and therefore the credit cannot be extended and Commissioner (Appeals) Order to this effect cannot be faulted with.
6. As regards other items, namely lamps, fluidic finish kit, saipper pads taking into consideration that they are used in relation to the manufacture of final products 1 hold that.the credit will be admissible. The appeal is disposed off in above terms.
