ORDER
P.G. Chacko, Member (J)
1. The appellants are manufacturers of non-ferrous metals and by-products. During April to June 1999, they took Modvat credit to the tune of Rs. 3,12,622/- on HR/CR Sheets, HR/SS Plates and Plain Plates under Rule 57Q of the erstwhile Central Excise Rules, 1944. They also took credit of Rs. 517/- on thermocouples during the same period. The show-cause notice, which was issued to deny the credits, alleged that the sheets and plates, having been used as raw materials for fabrication of various parts of the manufacturing plant, were not to be treated as parts of any machinery under Rule 57Q ibid. In relation to thermocouples, it was alleged that the said items, which were covered under Central Excise Tariff Heading 90.33, stood excluded from the category of modvatable capital goods. The allegations were denied by the appellants. The adjudicating authority disallowed the entire credit and imposed a penalty of Rs. 20,000/- on the party. The Commissioner (Appeals) upheld the denial of Modvat credit but vacated the penalty. In the present appeal, filed by the party challenging the denial of Modvat credit, the main ground is that the sheets and plates which were used for replacement of worn out parts of various machines are covered by ‘components or spares’ of such machines and, therefore, the benefit of Sl. No. 5 of the Table annexed to Rule 57Q (as the rule stood at the material time) should be extended to the items. The appellants have drawn support from dictionary meaning of the word ‘component’ as also from certain decisions of the Tribunal. In respect of thermocouple, however, there appears to be no serious challenge in the appeal.
2. Heard both the sides.
3. Ld. Counsel for the appellants reiterates the aforesaid grounds of the appeal and relies on a decision of this Bench rendered in an earlier appeal of the present appellants, reported as [2002 (150) E.L.T. 675 (T-Del.) = 2002 (53) RLT 70]. He also relies on a decision of this Bench in Simbhaoli Sugar Mills Ltd. v. CCE, Meerut [2001 (135) E.L.T. 1239 (Tribunal-Del.)] and points out that this decision has been affirmed by the Supreme Court.
4. Ld. DR, on the other hand, submits that the sheets and plates in question fall under Chapter 72 of the Central Excise Tariff Schedule, Headings whereof had stood excluded from the category of eligible capital goods under Rule 57Q at the material time. It is further contended that such plates and sheets which were used for fabrication of various parts of plants were in the nature of raw materials, which could not be treated as ‘components’ or ‘spares’ in terms of Sl. No. 5 of the Table annexed to Rule 57Q. Reliance is placed, in this connection, on the decision of this Bench in CCE, Jaipur-II v. Bhilwara Spinners Ltd. [2002 (150) E.L.T. 674]. Ld. DR also claimed support from the decision of the Tribunal’s Larger Bench in Jaypee Rewa Plant v. CCE, Raipur [2003 (159) E.L.T. 553 (Tri. – LB) = 2003 (88) ECC 503 (Tri-LB)].
5. I have considered the submissions. The argument raised by ld. DR would have been crucial, in this case, had there been appropriate specific allegation in the show-cause notice. The argument is that the sheets and plates were falling under Headings of Chapter 72 of the CET Schedule and hence stood excluded from the category of eligible capital goods under Rule 57Q. I find that there is no allegation in the show-cause notice to support this argument. The only allegation raised in the show-cause notice in relation to the sheets and plates is that the goods, having been used as raw materials for fabrication of parts of plant were not parts of any machinery and hence not covered under Rule 57Q. This allegation is impliedly relatable to Sl. No. 5 of the table annexed to Rule 57Q, which reads as under :-
“Components, spares, and accessories of the goods specified against Sl. Nos. 1 to 4 above.”
The party also understood the allegation with reference to the above entry under Rule 57Q. That is why they offered their own interpretation of the term ‘components’ in their reply to the show-cause notice. The dispute, therefore, needs to be settled with reference to the above entry under Rule 57Q. However, this could be done without attempting interpretation of the terms “components”, “spares”, or “accessories” inasmuch as the primary question is whether the machines, of which the subject items are claimed to be components or spares, are specified against Sl. Nos. 1 to 4 in the table annexed to Rule 57Q. On a perusal of the records, I have not come across any specific evidence in this regard. The appellants themselves do not appear to be have spelt out the exact identity of any machine (parts whereof are claimed to have been replaced) with specific reference to tariff entries. For want of identity of such machines, it is impossible to look into the question whether subject items were components or spares of any machine specified against S. Nos. 1 to 4 in the table ibid. Components and spares do not stand on their own. They must be components or spares of some machines. In the instant case, the identity of these machines has not been disclosed with reference to Tariff entries. In this context, the decision of the Tribunal in Simbhaoli Sugar Mills relied on by ld. Counsel is apposite. In that case, it was held that, for the purpose of deciding the eligibility of any item for capital goods credit under Rule 57Q, it had to be ascertained that the items which were claimed to be components/accessories of some machines were actually components/accessories. This decision has been upheld by the Supreme Court vide [2002 (139) E.L.T. A294]. Following this ratio, I hold that, for want of identity of the machines (parts whereof are claimed to have been replaced with the sheets and plates in question) under CET Tariff, it is a futile exercise to attempt to decide as to whether the sheets and plates are components or spares covered by Sl. No. 5 of the table annexed to Rule 57Q. This being the position, the other decision cited by ld. Counsel and the case law cited by ld. DR are not applicable. In the result, I have no option but to uphold the denial of Modvat credit in respect of the sheets and plates. Insofar as thermocouples are concerned, the credit disallowed is to the extent of only Rs. 517/- and there is no serious challenge to the finding recorded by the Commissioner (Appeals) that these goods, falling under Heading 90.33 of the CET Schedule, do not qualify to be capital goods for Modvat credit.
6. In the result, the appeal is rejected.