ORDER
G.N. Srinivasan, Member (Judicial)
1. In this bunch of appeals, Appeal E/1980/97 has been field by the Commissioner, whereas other appeals have been filed by the assessee. We shall take up the facts in the Appeal 2355/97. The assessee in this batch of appeals is manufacturing HR coils. The appellants claimed modvat credit in respect of Cement, Magnesium, Ramming Mass, Mortar, Refractory items, Chemical Binders, Fluxes, EPABX, Lathe Machine Parts, Construction equipments, Grease Gums and claimed modvat credit in terms of Rule 57Q as capital goods. The Commissioner by the impugned order has rejected the modvat credit on various grounds for different items. Hence the present appeal by the assessee. As far as E/980/97 is concerned by the impugned order, the Commissioner has allowed the modvat credit in respect of HR plates and coil used in conveyor gallery as parts against which department has filed the appeal.
2. As far as the items for which modvat credit has been denied it is the contention of the assessee before us that in respect at least of cement and steel it is stated that the articles were used in the foundation of the plant and machinery and were also used in the fabrication of various structural items with specific design as per the technological requirement for carrying out the manufacturing process. It is the affirmation of the appellant before us that these structures are an integral part of the plant and unless these are made or installed as per design using the specific quantity of cement and steel of a required strength, it will not be possible to install various machines, machinery, equipment, apparatus for the production process. For this he cites the judgment of Bombay High Court in CIT v. Mazgaon Docks Ltd. 1991 (191) ITR 460. As far as magnesium and ramming mass are concerned, these items are used as part of the furnace in providing refractory lining of the inside of furnace and other equipment which handle molten metal to support the metal from the furnace walls. It is also the contention of the appellant that unless such refractory lining is provided in the furnace, the high temperature generated in the furnace will destroy the furnace within no time and he cites certain decisions. For each time like refractory fire care the stress is that unless they are used, the furnace itself will get damaged. As far as certain chemicals like conbextra and corrolin are concerned, they are used in the foundation of machine to give added strength of the same. It is stressed before us that they are not normally used in the civil construction that they have been used to meet some process related requirements. If it is the argument of the Ld. CA that if the modvat credit is not given under Rule 57Q it should be given under Rule 57A as inputs. He is claiming them as capital goods and but as an alternative he claims them as an inputs.
3. Dr. Hitesh Shah learned SDR is that these items when they are used in the factory of the appellant they become part of the immovable property hence they cannot be claimed to the other inputs under Rule 57A of the Central Excise Rules or capital under Rule 57Q of the Cental Excise Rules. He stressed the point that the term plant has to be interpreted in a restrictive way and to be treated in a similar way to the other words like machines, machinery and the term plant may be allowed to draw the colour from the surrounding words.
4. DR relied on the following judgments:
1. State of Bihar v. Steel City Beverages Ltd., AR 1989 SC 235
2. J.K. Cotton Spinning & Weaving Mills v. Sales Tax Officer 1997 (91) ELT 34 (S.C.)
3. Usha Ispat v. Commissioner of Central Excise – Pune 2000 (125) ELT 1184
4. Malvika Steel v. Collector of Central Excise – Allahabad 1998 (97) ELT 530
5. Rosa Sugar Works v. Commissioner of Central Excise – Kanpur 1999 114 ELT 950
6. Quality Steel Tupes (P) Ltd. v. Collector of Central Excise 1995 (75) E.L.T. 17 (S.C.)
7. Navakarnataka Steels Ltd. v. Commissioner of Central Excise Belgaum 2000 (123) ELT 913
8. SPCI v. Commissioner of Central Excise Madras 1999 (105) ELT 460
9. Philips India Ltd. v. Labour Court, Madras AIR 1985 Mad 1024
10. Chief Justice, Andhra Pradesh v. L.V.A. Dikshitulu AIR 1979 SC 193
11. Rainbow Steel Ltd. v. Commissioner of Sales Tax Uttar Pradesh AIR 1981 SC 2101
12. Commissioner of Income Tax, Trivandrum v. Anand Theatres AIR 2000 SC 2356
5. We have considered the rival contention. The question involved in this appeal whether the various itemised below the modvat credit on capital goods can be granted or not. We have put below the contention of both the parties:
Particulars of items on which Modvat Credit has been disallowed, reasons for disallowing the same and appellant’s contention on the same.
Appeal No. E-446-2000:
SI. No
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed
Use to which the item is
being put to.
Appellant’s Contenlion
(i)
(ii)
(iii)
(IV)
(v)
01
Cement under Chapter
2502.29
87,150/-
(i) Cement & steel
structures used for foundation for providing supports lo machines, are
eligible to capital goods credited in terms of clause (a) of explanation 1 to
Rule 57 Q as capital goods, as has been hc!d by the Hon’ble Tribunal in the
case of United Phosphorous Vs. CCE, VadodaraC-II/2230′ WZB/2001 dated
31.8.2001, wherein the Hon’ble Tribunal by relying upon the decision in
Jawahar Mills Vs. CCE 1999 ( 1 08) ELT 47, wherein it was held tha* goods
which arc required to be used by a manufacturer for making a finished
product, allowed credit on cement and steel under Rule 57Q.
Steel
1,12,370/
(ii) The items in
dispute are eligible to Modvat Credit as plant under Clause (a) of
explanation 1 to Rule
57Q in terms of the judgement oi the
Hon’ble Supreme Court in the case of CCE Vs. Jawahar Mills, wherein cable was
used for producing or processing of any goods or for biinging about any
change in any substance tor manufacture of final product, was held as
eligible to capita) goods credit as a plant in terms of clause (a) of
explanation 1 to Rule 57Q.
(iii) Alternatively,
goods in question are parts /components of foundation/ structural which is a
part/coniponent of a plant and are eligible to capital goods credit in terms
of clause (b) of explanation (1) to Rule 57Q are a par/component of a plant
eligible to credit.
(iv) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the Hon’ble Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1999 (11 3) ELT
558 (T) wherein it was
held that there is no requirement under Rule 57Q to the effect that, to be
classified as capital goods, the goods must not form part of any immovable
property.
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57 A inasmuch as the larger bench of the Hon’ble Tribunal in the case of
Union Carbide Vs. CCE 199(5 (86) ELT 613, wherein it was held that said case
that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule S7A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phosphorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Lloyds Metals & Enggs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Enggs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 7.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Col Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Cmsnr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(i)
(ii)
(iii)
(iv)
(v)
02
Computers
21,084/-
The same is attached to
the weighing machine and is used to weigh plates and coils which are
manufactured.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2001 (132) ELT 3, wherein cable was used for producing
or processing of any goods or for bringing about any change in any substance
for manufacture of final product, was held as eligible to capital goods
credit as a plant in terms of clause (a) of explanation 1 to Rule57Q.
(ii) Alternatively,
goods in question are which is part/component of the plant and is eligible to
capital goods credit in terms of clause (b) of
explanation (1) to Rule
570 are as part/component.
(iii) Alternatively, the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its perview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T).
(i)
(ii)
(iii)
(iv)
(v)
03
Grease Pump
2,033/-
It is used for
lubricating the rolling mills which handles heavy material in the course of
rolling at high speed.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahai Mills 2C01 (132) ELT 3, wherein cable was used for producing
or processing of any goods or for bringing about any change in any substance
for manufacture of final product, was held as eligible to capital goods
credit as a plant in terms of clause (a) of explanation 1 to Rule 57Q
(ii) Alternatively,
goods in question are used in making of a part/component of a plant which is
a part/component of a plant and are eligible
to capital goods credit
in terms of clause (b) of explanation (1) to Rule 57Q ate a par/component of
a plant eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57 A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its perview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T).
Appeal No. E/3886/98
SI. No
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed
Use to which the item is
being put to.
Appellant’s Contention
(i)
(ii)
(iii)
(iv)
(v)
01
CTD Bars under Chapter
7214.90
Cement under
Chapter 2502.29
2,99,102/
5,64,900/
(i) Cement & steel
structures used for foundation for providing supports to machines, are
eligible to capital goods credited in terms of clause (a) of explanation 1 to
Rule 57 Q as capita! goods, as has been held by the Hon’ble Tribunal in the
case of United Phosphorous Vs. CCE, VadodaraC-U 722307 WZB7 2001 dated
31.8.2001, wherein the Hon’ble Tribunal by relying upon the decision in
Jawahar Mills Vs. CCE 1999 (108)ELT47, whereinil was held that goods which
are required to be used by a manufacturer for making a finished product,
allowed credit on cement and steel under Rule 57Q.
(ii) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2001 (312)ELT3, wherein cable was used for producing
or processing of any goods or for bringing about any change in any substance
for manufacture of final product, was held as eligible to capital goods
credit as a plant in terms of clause (a) of explanation 1 to Rule 57Q.
(iii) Alternatively,
goods in question are parts /components of foundation/ structural which is a
part/component of a plant and are eligible to capital goods credit in terms
of clause (b) of explanation (1) to Rule 57Q are a par/component of a plant
eligible to credit.
(iv) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the Hon’ble Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1999(113) ELT 558 (T) wherein it was
held that there is no requirement under Rule 57Q to the effect that, to be
classified as capital goods, the goods must not form part of any immovable
property.
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal in the case of Union
Carbide Vs. CCE, wherein it was held that said case that the definition of
the term input was wide enough to include even machine, machinery, plant,
equipment and that it was only because of the exclusion clause to Rule 5 7A
that excluded capital goods from its purview. As a natural corollary of the
same, it was contended that if goods in question are not covered in the
definition of capital goods the same would necessarily be covered as input in
terms of Rule 57A.
Case Laws relied upon:
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phosphorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Lloyds Metals & Enggs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Enggs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 17.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Co. Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Cmsnr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(i)
(ii)
(iii)
(iv)
(v)
02
Computer cabin cabinets
7,243/-
These are used to house
the computers which.are essential as process control equipments and are used
in the production/proc essing of the final product.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2C01 (132) ELT 3, wherein cable was used for producing
or processing of any goods or for bringing about any change in any substance
for manufacture of final product, was held as eligible to capital goods
credit as a plant in terms of clause (a) of explanation 1 to Rule 57Q.
(ii) Alternatively,
goods in question are part/ component of a plant,
machine, machinery are
eligible to capital goods credit in terms of clause (b) of explanation (1) to
Rule 57Q are a part/component.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (96) ELT 613 (T)
Appeal No. E/2614/98
SI. No
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed
Use to which the item is
being put to.
Appellant’s Contention
(i)
(ii)
(iii)
(iv)
(v)
01
CTD Bars under
Chapter 7214.90
Cement under
Chapter 2502.29
1,75,096/
1,13,772/
Cement, Iron & steel
articles are used in the foundation of plant & machinery & also used
in fabrication of various structural with specific design as per
technological requirement for carrying out manufacturing process. These structural
are integral part of the plant. Unless these structures are made/installed as
per design, using the specified quantity of cement and steel sections of the
specified size & strength it is not possible to install various machines,
machinery, equipments, apparatus for the production process to be carried on.
(i) Cement & steel
structures used for foundation for providing supports to machines, are
eligible to capital goods credited in terms of clause (a) of explanation 1 to
Rule 57 Q as capital goods, as has been held by the Hon’We Tribunal in the
case of United Phosphorous Vs. CCE, Vadodara C-II 722307 WZB/ 2001 dated
31.8.2001, wherein the Hon’ble Tribunal by relying upon the decision in
Jawahar Mills Vs. CCE 1999 (108) ELT 47, wherein it was held that goods which
are required to be used by a manufacturer for making a finished product,
allowed credit on cement and steel under Rule 57Q. (ii) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2001 (132) ELT 3,wherein cable was used for
producing or processing of any goods or for bringing about any change in any
substance for manufacture of final product, was held as eligible to capital
goods credit as a plant in terms of clause (a) of explanation 1 to Rule 57Q.
(iii) Alternatively, goods in question are parts /components of
foundation/ structural
which is a part/component of a plant and are eligible to capital goods credit
in terms of clause (b) of explanation (1) to Rule 57Q are a par/component of
a plant eligible to credit.
(iv) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the Hon’ble Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1999(113) ELT 558 (T) wherein it was
held that there is no requirement under Rule 57Q to the effect that, to be
classified as capital goods, the goods must not form part of any immovable
property.
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal in the case of Union
Carbide Vs. CCE, wherein it was held that said case that the definition of
the term input was wide enough to include even machine, machinery, plant,
equipment and that it was only because of the exclusion clause to Rule 57A
that excluded capital goods from its purview. As a natural corollary of the
same, it was contended that if goods in question are not covered in the
definition of capital goods the same would necessarily be covered as input in
terms of Rule 57A.
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phosphorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Lloyds Metals & Enggs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Enggs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 17.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Co. Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Cmsnr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(i)
(ii)
(iii)
(iv)
(v)
02
HOPE Pipes
3,23,573/
They are used in the
factory to carry water to quench the sponge iron when it is obtained form the
furnace
(i) The items in d’spute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills, wherein cable was used for producing or processing of
any goods or for bringing about any change in any substance for manufacture
of final product, was held as eligible to capital goods credit as a plant in
terms of clause (a) of explanation 1 to Rule 57Q.
(ii) Alternatively,
goods in question are part/ component of machine/
machinery and are
eligible to capital goods credit in terms of clause (b) of explanation (1) to
Rule 57Q.
(Hi) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the exclusion
clause to Rule 57A that excluded capital goods from its purview. As a natural
corollary of the same, it was contended that if goods in question are not
covered in the definition of capital goods the same would necessarily be
covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T)
Appeal No. E/2356/97
SI. No
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed
Use to which the item is
being put to.
Appellant’s Contention
(i)
(ii)
(iii)
(iv)
(v)
01
Cement falling under
Chapter heading 2502.29
23,100/-
Cement Iron & Steel
articles are used in the foundation of plant & machinery and also in the
fabrication of various structural with specific designs as per the
technological requirement for carrying out the manufacturing process. These
structurals are integral part ol the plant, Unless these structures are made/
installed as per design, using the specified quantity of Cement & Stee
sections of the specified size & strength it is not possible to install
various machines, machinery, equipments, apparatus for the production process
to be carried on.
[i) Cement & steel
structures used for foundation for providing supports to machines, are
eligible to capital goods credited in terms of clause (a) of explanation 1 to
Rule 57 Q as capital goods, as has been held by the Hon’ble Tribunal in the
case of United Phosphorous Vs. CCE, Vadodara C-II 722307 WZB7 2001 dated
31.8.2001, wherein the Hon’ble Tribunal by relying upon the decision in
Jawahar Mills Vs. CCE 1999 nOR^RLT 47, wherein it was held that goods which are
required to be used by a manufacturer for making a finished product, allowed
credit on cement and steel under Rule 57Q. (ii) The items in dispute are
eligible to Modvat Credit as plant under Clause (a) of explanation 1 to Rule
57Q in terms of the judgement of the Hon’ble Supreme Court in the case of CCE
Vs, Jawahar Mills 2001 ( 1 32) ELT 3, wherein cable was used for producing or
processing of any goods or for bringing about any change in any substance for
manufacture of final product, was held as eligible to capital goods credit as
a plant in terms of clause (a) of explanation 1 to Rule 57Q.
CTD Bars falling under
Chapter 7214.90
1,14,040/
M.S. Angles; Joists;
Channels falling
under Chapter
7216.10
1,14,461/
20,800/
1,027/-
G.C.Sheets Falling
under Chapter
7210.11
20,8337
(iii) Alternatively,
goods in question are parts /components of foundation/ structural which is a
part/component of a plant and are eligible to capital goods credit in terms
of clause (b) of explanation (1) to Rule 57Q are a par/component of a plant
eligible to credit.
(iv) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the Hon’ble Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1999 (113) ELT 558 (T) wherein it was
held that there is no requirement under Rule 57Q to the effect that, to be
classified as capital goods, the goods must not form part of any immovable
property.
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal in the case of Union
Carbide Vs. CCE, wherein it was held that said case that the definition of
the term input was wide enough to include even machine, machinery, plant,
equipment and that it was only because of the exclusion clause to Rule 57A
that excluded capital goods from its purview. As a natural corollary of the
same, it was contended that if goods in question are not covered in the
definition of capital goods the same would necessarily be covered as input in
terms of Rule 57A.
Case Laws relied upon:
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phos phorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Llopds Metals & Enggs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Enggs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 17.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Co. Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Cmsnr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(i)
(ii)
(iii)
(iv)
(v)
02
Mag. Ramming Mass
5,03,870/
The item in question is
used as part of the furnace in providing refractory lining on the inside of
furnace and other equipments which handle molten metal to separate the molten
metal from the furnace walls. Unless such refractory lining is provided to the
furnace the high temperature destroys the furnace within no time.
(i) the same is a
part/component of furnace and are eligible to capital goods credited under
clause (b) of explanation 1 to Rule 57Q as has been held by the Hon’ble
Tribunal in the case of L & T Vs. CCE and Jindal Vs. CCE.
Refractory Motor/ Ref.
Castables
1,67,548/
(ii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the case of
Union Carbide Vs. CCE, held that the definition of the term input was wide
enough to include even machine, machinery, plant, equipment and that it was
only because of the exclusion clause to Rule 57A that
Ankerjets
3,06,502/
Houghto Safe
88.000/-
Filing compound/
Materials all falling under Chapter 3816.00
2,50,939/
Nozolex Garpack Sleeves
32,900/
excluded capital goods
from its purview. As a natural corollary of the same, it was contended that
if goods in question are not covered in the definition of capital goods the
same would necessarily be covered as input in terms of Rule 57A. The goods in
question have been held to be eligible to input stage credit in the
following.decisions –
(a) Modella Steel Alloys
Ltd. Vs. CCE 1999 (108) ELT 463 (T)
(b) Singh Alloys &
Steel Ltd., Vs. Asst. Collectors of Central Excise 1993 (66) ELT 594 (Cal)
(c) Escorts Ltd., Vs.
CCE 2000 (120) ELT 75 (Kar)
Case Laws relied upon:
(i) Singh Alloys & Steel Ltd. v. C.C.Ex. 1993 (66) ELT 594 (Cal)
(ii) Escorts Ltd. v. C.C.Ex.
(iii) Modella Steel Alloys Ltd. v. CCE; 1999 (31) RLT 203 (T)
(i)
(ii’)
(iii)
(iv)
(v)
03
H.S. S. Drill under
Chapter 8207.00
4.618/-
The tools and equipments
used in the manufacturing process are part and parcel of plant. These are an
integral part of every manufacturing plant.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2001 ( 1 32) ELT 3, wherein cable was used for producing
or processing of any goods or for bringing about any change in any substance
for manufacture of final product, was held as eligible to capital goods
credit as a plant in terms of clause (a) of explanation 1 to Rule 57Q.
Lathe Machine under
Chapter 8458.00
1,13,967/-
-do-
Welding Rod under
Chapter 83 11. 00
7,665/-
lt is used for cutting
uneven edges of slabs and sheets. In this sense welding rod
is required for
manufacturing final product.
(ii) Alternatively,
goods in question are parts/components of machines, and are eligible to
capital goods credit in terms of clause (b) of explanation (1) to Rule 57Q
are a par/component of a plant eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T)
Appeal No. E/2355
SI. No.
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed Rs,
Use to which the item is
being put to.
Appellants contention
(i)
(ii)
(iii)
(iv)
(v)
01
Cement falling under
chapter 2502.29
4,03,900/-
Cement Iron & Steel
articles are used in the foundation of plant &machinery and also in the
fabrication of various structural with specific designs as per the
technological requirement for carrying out the manufacturing process. These
structurals are integral part of the plant, Unless these structures are made/
installed as per design, using the specified quantity of Cement & Steel
sections of the specified size & strength it is not possible to install
various machines,
(i) Cement & steel
structures used for foundation for providing supports to machines, are
eligible to capital goods credited in terms of clause (a) of explanation 1 to
Rule 57 Q as capital goods, as has been held by the Hon’ble Tribunal in the
case of United Phosphorous Vs. CCE, VadodaraC-K 722307 WZB/2001 dated
31.8.2001, wherein the Hon’ble Tribunal by relying upon the decision in
Jawahar Mills Vs. CCE 1999 (1 08) ELT 47, wherein it was held that goods
which are required to be used by a manufacturer for making a finished
product, allowed credit on cement and steel under Rule 57Q. (ii) The items in
dispute are eligible to Modval Credit as plant under
Machimery equipments,apprturs
for the production process to be carried on.
Clause (a) of explanation
1 to Rule for the 57Q in judgement of the Hon’ble
Supreme , Court in the case of earned on. ,. . . , , CCE Vs. JawahafMills
2001 (132) ELT 3, wherein cable was used for producing or processing of any
goods or for bringing about any change in any substance for manufacture of
final product, was held as eligible to capital goods credit as a plant in
terms of clause (a) of explanation 1 to Rule 57Q.
(iii) Alternatively,
goods in question are parts /components of foundation/ slruclural which is a
part/component of a plant and are eligible to capital goods credit in terms
of clause (b) of explanation (1) to Rule 57Q are a par/component of a plant
eligible to credit.
(iv) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the
Hon’bie Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1999 (113) ELT 558 (T) wherein it was
held that there is no requirement under Rule 57Q lo ilie elVecl that, to be
classified as capital goods, the goods must not form part of any immovable property.
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’bie Tribunal in the case of Union
Carbide Vs. CCE, wherein it was held that said case that the definition of
the term input was wide enough to include even machine, machinery, plant,
equipment and that it was only because of the exclusion clause to Rule 57A
that excluded capital goods from its purview. As a natural corollary of the
same, it was contended that if goods in question are not covered in the
definition of capital goods the same would necessarily be covered as input in
terms of Rule 57A.
Case Laws relied upon:
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phosphorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Lloyds Metals & Engrs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Engrs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 7.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Co. Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Commr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(i) 02
(“) Ramming Mass;Refractory Motor;Fire crete/ whytheat/ Gunning
Mix/ Nozzle Filling Materials/Nozzles Garpax falling under Chapter 3816
(iii) 6,05,285/-1,26,203/-1,22,940/-
(iv) Items in question are used as part of the furnace in providing
refractory lining on the inside of furnace and other equipments which handle molten
metal to separate the molten metal from the furnace walls. Unless such refractory
lining is provided in the furnace, the high temperature destroy the furnace within
no time.
(v) (i) the same is a part/component of furnace and are eligible
to capital goods credited under clause (b) of explanation 1 to Rule 57Q as has
been held by the Hon’ble Tribunal in the case of L & T Vs. CCE and Jindal
Vs. CCE. (ii) Alternatively the goods in question were eligible to Modvat Credit
as inputs in terms of Rule 57A inasmuch as the larger bench of the Hon’ble Tribunal
held in the case of Union Carbide Vs. CCE 1996(86) ELT 6 13. held that the definition
of the term input was wide enough to include even machine, machinery, plant, equipment
and that it was only because of the
exclusion clause to Rule
57A that excluded capital goods from its purview. As a natural corollary of
the same, it was contended that if goods in question are not covered in the
definition of capital goods the same would necessarily be covered as input in
terms of Rule 57A. The goods in question have been held to be eligible to
input stage credit in the following decisions –
(d) Modella Steel
Alloys; Lid. Vs. CCE 1999 (108)ELT463 (T)
(e) Singh Alloys &
Slecl Ltd., Vs. Asst. Collectors of Central Excise 1993 (66) ELT 594 (Cal)
(f) Escorts Ltd., Vs.
CCE 2000 (120) ELT 75 (Kar)
Case Laws relied upon:
(i) Singh Alloys & Steel Ltd. v. C.C.Ex. 1993 (66) ELT 594 (Cal)
(ii) Escorts Ltd. v. C.C.Ex.
(iii) Modella Steel Alloys Ltd. v. CCE; 1999 (31) RLT 203 (T)
(ii) 03
(ii) Conbextra falling
under Chapter 3823.00
Coronil (Chemicals)
falling under Chapter 38 10.00
(iii) 12,400/-
441/-
(iv) This is a special
type of chemical used in the foundation of machines to give added strength to
the same. These are used lo meet some process related requirements.
(v) i) The items in
dispute are eligible toModvat Credit as plant under Clause (a) of explanation
I to Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the
case of CCE Vs. Jawahar Mills, wherein cable was used for producing or
processing of any goods or for bringing about any change in any substance for
manufacture of final product, was held as eligible to capital goods credit as
a plant in terms of clause (a) of explanation 1 to Rule 57Q.
ii) Alternatively, goods
in question are used in making of a part/ component i.e. foundation/
structural, which is a part/ component of a plant and are eligible to capital
goods credit in terms of clause (b) of explanation (1) lo Rule 570 are a
par/component of a plant eligible to credit.
iii) Alternatively, the goods in question were
eligible to Modvat Credit as inputs in terms of Rule 57A inasmuch as the
larger bench of the Hon’blc Tribunal held in the said case that the
definition of the term input was wide enough to include even machine,
machinery, plant, equipment and that it was only because of the exclusion
clause to Rule 57A that excluded capital goods from its purview. As a natural
corollary of the same, it was contended that if goods in question are not
covered in the definition of capital goods the same would necessarily be
covered as input In terms of
Rule 57A.
Case Laws relied upon:
(i) Singh Alloys & Steel Ltd. v. C.C.Ex. 1993 (66) ELT 594 (Cal)
(ii) Escorts Ltd. v. C.C.Ex.
(iii) Modella Steel Alloys Ltd. v. CCE; 1999 (31) RLT 203 (T)
(i)
(ii)
(iii)
(iv)
(v)
04
Nuts; Bolts & screws
falling under chapter 7318.10
7,529/-
These are special types
of Nuts and Bolts and not used for general purpose. These are very costly
items manufactured to very specific designs. The requirement of fastner of
each machine is very specific and only the nuts and bolts of that specific
design and specification can be used.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills 2001 (132) ELT 3, wiierein cable was used for
producing or processing of any goods or for bringing about any change in any
substance for manufacture of final product, was held as eligible to capital
goods credit as a plant in terms of clause (a) of explanation 1 !o Rule 57Q.
(ii) Alterm.lively,
goods in question are used in making of a part/ component i.e. foundation/
structural, which is a part/component of a plant and are eligible to capital
goods credit in terms of clause (b) of
explanation (1) to Rule
57Q are a par/component of a plant eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57 A.
Case Laws relied upon
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T)
(i)n
(ii)
(iii)
(iv)
(v)
05
H.S.S. Taps
2,8271-
The tools and equipments used in the manufacturing
process are part and parcel of the plant. These are an integral part of every
manufacturing plant.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills, wherein cable was used for producing or processing
of any goods or for bringing about any change in any substance for
manufacture of final product, was held as eligible to capital goods credil as
a plant in terms of clause (a) of explanation 1 to Rule 57Q.
(ii) Alternatively, goods in question are used in
making of a part/ component i.e. foundation / structural, which is a
part/component of a plant and are eligible to capital goods
credit in tenns or
clause (b) of explanation (1) to Rule 57Q are a par/component of a plant
eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in tenns of Rule
57A inasmuch as the larger bench oftheHon’ble Tribunal held in the said case
that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T)
Appeal No. E/2094/97
SI.No
Particulars of goods on
which Modvat Credit is denied with relevant tariff heading.
Amount of Credit
disallowed Rs.
Use to which the item is
being put to.
Appellant’s Contention
(i)
(ii)
(iii)
(iv)
(v)
01
Cement falling under
Chapter 2502.29 and Angle: Joists CTD Bars falling under Chapter 72
Iron & Steel
articles, Angles, Joists and CTD Bars falling under Chapters 7216. 10 and
7214.90
3,99,3507
3,49,6597
Cement, Iron & Steel
articles are used in the foundation of Plant & Machinery and also used in
the fabrication of various structural with specific design as per
technological requirement for carrying out the manufacturing process. These
structurals are integral part of the plant. Unless these structures are
made/installed as per design, using the specified quantity of Cement &
Steel sections of the specified size & strength it is not possible to
install various machines, machinery equipments apparatus for the production process
to be carried on. Accordingly, Cement & Steel which go into the making of
such
(i) Cement & steel
structures used for foundation for providing supports to machines, are
eligible to capital goods credited in terms of clause (a) of explanation I to Rule 57 Q as capital goods, as
has been held by the Hon’ble Tribunal in the case of United Phosphorous Vs.
CCE, VadodaraC-11/2230/ WZB/2001 dated 31.8.2001, wherein the Hon’ble
Tribunal by relying upon the decision in Jawahar Mills Vs. CCE 1999 ( 1 08) ELT
47, wherein it was held that goods which art required to be used by a
manufacturer for making a finished product, allowed credit on cement and
steel under Rule 57Q. (ii) The items in dispute are eligible to Modvat Credit
as plant under Clause (a) of explanation 1 to Rule 57Q ir, terms of the
judgement of the Hon’ble Supreme Court in the case of
structures are by
definition ingredients/ components of plant and eligible for Modvat Credit.
CCE Vs. Jawahar Mills
2001 (132) ELT 3, wherein cable was used for producing or processing of any
goods or Per bringing about any change in any substance for manufacture of
final product, was held as eligible to capital goods credit as a plant in
terms of clause (a) of explanation 1 to Rule 57Q.
(iii) Alternatively,
goods in question are parts /components of foundation/ structural which is a
part/component of a plant and are eligible to capital goods credit in terms
of clause (b) of explanation (1) to Rule 570 are a par/component of a plant
eligible to credit.
(w) That respondent had
erred in holding that for being eligible to Modvat Credit under Rule 57Q,
capital goods themselves should be liable to duty. Reliance in this regard
was placed by the appellant on the decision of the
Hon’ble Tribunal in case
of Mahalaxmi Glass Works Ltd. Vs. CCE 1 999(113) ELT 558 (T) wherein it was
held that there is no requirement under Rule 57Q to the effect that, to be
classified as capital goods, the goods must not form part of any immovable
property,
(v) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57A inasmuch as the larger bench of the Hon’bie Tribunal in the case of Union
Carbide Vs. CCE 1996 (86) ELT 63, wherein it was held that said case that the
definition of the term input was wide enough to include even machine,
machinery, plant, equipment and that it was only because of the exclusion
clause to Rule 57A that excluded capital goods from its purview. As a natural
corollary of the same, it was contended that if goods in question are not
covered in the definition of capital goods the same would necessarily be
covered as input in terms of Rule 57A.
Case Laws relied upon:
(0) CCE v. Jawahar Mills – 2001 (132) ELT 3 (SC)
(0i) United Phosphorus v. CCE, 2002 (150) ELT 650 (T)
(0ii) Lloyds Metals & Engrs. v. CCE order No. C-II/360-62/WZB/2002 dtd. 1.2.02
(0iii) Lloyds Metals & Engrs. v. CCE Order No. C-II/2664/WZB/2001 dtd. 17.10.01
(i) CIT v. Mazagaon Docks Ltd. 1991 ITR 460 (Bom)
(ii) IRC v. Barclay Circle Co. Ltd., 1970 (76) ITR 62
(iii) CIT v. Taj Mahal Hotel 1971 (82) ITR 44 (SC)
(iv) Addl. Commr. of IT v. Madras Cements Ltd.; 1997 (110) ITR 281 (Mad)
(v) New J.K. Cement Works v. CCE; 1999 (113) ELT 428 (T)
(vi) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613
(vii) CCE v. TELCO 1999 (111) ELT 9 (Pat)
(viii) Star Paper Mills v. CCE 1999 (107) ELT 241 (T)
(ix) Nippon Denro Ispat v. CCE 2000 (117) ELT 469 (5)
(x) Mahalaxmi Glass Works Ltd. v. CCE 1999 (113) ELT 558
(1)
(ii)
(iii)
(iv)
(v)
02
Refractory Mortor
falling under Chapter 3816.00
Mag. Ramming Mass
falling under Chapter 3816.00
Garpak Coronil falling
under Chapter 3823.00
2,02,415/-
3,74,344/
14,029/-
The item in question is used
as part of furnace in providing rcfracloiy lining on the inside of furnace
and other equipments with handle molten metal to separate the molten metal
from the furnace walls. Unless such refractory lining is provided to the
furnace, the high temperature destroys the furnace within no time.
(i) The same is a
part/component of furnace and at c eligible to capital goods credited under
clause (b) of explanation I to Rule 57Q as lias been held by the Hon’ble
Tribunal in the case of L & T Vs CCE and Jindal.Ys.CC& (ii)
Alternatively the goods in question were eligible to Modvat Credit as inputs
in terms of Rule 57A inasmuch as the larger bench of the Hon’ble Tribunal
held in the case of Union Carbide Vs. CCC, held that the definition of the
term input was wide enough to include even machine, machinery,
plant, equipment and
that it. was only because of the exclusion clause to Rule 57 A that excluded
capital goods from its purview. As a natural corollary of the same, it was
contended that if goods in question are not covered in the definition of
capital goods the same would necessarily be covered as input in terms of
Rule57A. The goods in question have been held to be eligible to input stage
credit in the following decisions –
a) Modella Steel Alloys
Ltd. Vs. CCE 1999(108) ELT 463 (T)
b) Singh Alloys &
Steel Ltd., Vs. Assf. Collectors of Central Excise 1993 (66) ELT 594 (Cal)
c) Escorts Ltd., Vs. CCE
2000 (120) ELT 75 (Kar)
Case Laws relied upon:
(i) Singh Alloys & Steel Ltd. v. C.C.Ex. 1993 (66) ELT 594 (Cal)
(ii) Escorts Ltd. v. C.C.Ex.
(iii) Modella Steel Alloys Ltd. v. CCE; 1993 (31) RLT 203 (T)
03
Adhesive labels falling
under Chapter 3919.00
5,198/-
Respondent has erred in
disallowing Modvat Credit, even after concluding that Adhesive label was
eligible to Modvat Credit as inputs and not as Capital goods as claimed by
the appellant. Appellants submit that it is a well settled law that if an
item is eligible to Modvat Credit, the same cannot be denied for ihe mere
fact that the same has been claimed under heading different from the one
under which it has been held to be eligible. Reliance in this regard is
placed on the decision in the case of CCE Vs. Modi Rubber 2000(38)RLT718(T)
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T)
04
Nuts; Bolts & Screws
falling under Chapter 7318.10
954/-
These are special types
of Nuts and Bolts and not used for general purposes. These are very costly
items manufactured to a very specific design. The requirement of fastner of
each machine is veiy specific and only the nuts and bolts of that specific
design and specification can he used.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills, wherein cable was used for producing or processing
of any goods or for bringing about any change in any substance for
manufacture of final product, was held as eligible to capital goods credit as
a plant in terms of clause (a) of explanation 1 to Rule 57Q
(ii) Alternatively,
goods in question are part/component of machine /machinery plants which are
eligible capital goods credit in terms of clause (b) of explanation (1) to
Rule 57Q are a par/component of a plant eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms of Rule
57 A inasmuch as the larger bench of the Ilon’blc Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57 A that excluded capital goods :flrom
its purview. As a natural corollary of the same, it was contended that if
goods in question are not covered in the definition of capital goods the same
would necessarily be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T).
05
Computers falling under
Chapter 8471.00
83,273/-
To monitor and regulate
the manufacturing process in various sections computerized methods are
adopted. These are such types of instruments used in the manufacturing
process.
i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills, wherein cable was used for producing or processing
of any goods or tor bringing about any change in any substance for
manufacture of final product, was held as eligible to capital goods credit as
a plant in terms of clause (a) of explanation 1 to Rule 57Q.
ii) Alternatively, goods
in question are part/component of machine /machinery plants which arc
eligible capital goods credit in terms of clause (b) of explanation (1) to
Rule 57Q are a
par/component of a plant
eligible to credit.
(iii) Alternatively the
goods in question were eligible to Modvat Credit as inputs in terms oi’ Rule
57 A inasmuch as the larger bench of thc Hon’blc Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in rerms of Rule57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd., v. CCE 1996 (86) ELT 613 (T).
(i)
(ii)
(iii)
(iv)
(v)
06
EPABX falling under
Chapter 8517.00
889/-
Telephone instruments
None
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T).
(i)
(ii)
(iii)
(iv)
(v)
07
Tools falling under
Chapter 8207.00 and 8209.00
98,426/-
The tools and equipments
used in the manufacturing process are part and parcel of the plant. These are
an integral part of every manufacturing plant.
(i) The items in dispute
are eligible to Modvat Credit as plant under Clause (a) of explanation 1 to
Rule 57Q in terms of the judgement of the Hon’ble Supreme Court in the case
of CCE Vs. Jawahar Mills, wherein cable was used for producing or processing of
any goods or for bringing about any change in any substance for manufacture
of final product, was held as eligible to capital goods credit as a plant in
terms of clause (a) of explanation 1 to Rule 57Q.
(ii) Alternatively,
goods in question are part/component of machine /machinery plants which are
eligible capital goods credit in terms of clause (b) of
explanation (1) to Rule
57Q are a par/component of a plant eligible to credit.
(iii) Alternatively the
goods in questiorrwere eligible to Modvat Credit as inputs in terms of Rule
57 A inasmuch as the larger bench of the Hon’ble Tribunal held in the said
case that the definition of the term input was wide enough to include even
machine, machinery, plant, equipment and that it was only because of the
exclusion clause to Rule 57A that excluded capital goods from its purview. As
a natural corollary of the same, it was contended that if goods in question
are not covered in the definition of capital goods the same would necessarily
be covered as input in terms of Rule 57A.
Case Laws relied upon:
(i) CCE v. Jawahar Mills Ltd., 2001 (132) ELT (3) (SC)
(ii) Union Carbide India Ltd. v. CCE 1996 (86) ELT 613 (T).
6. In the Anand Theatre case AIR 2000 SC 2356 the court held in paragraph 54 the plant in their view, building for hotel or cinema cannot be stated to be adjunct, that is to say, (as per dictionary meaning of the word ‘adjunct’) something added to anther or it is in a subordinate, auxiliary or dependent position. In our view the said case which dealt with question of the depreciation under Section 32 of the Income Tax Act. The extent content and ambit of the said section is entirely different with that of Rule 57 Q of the Central Excise Rules. The said Rule provides interalia that it shall be applicable to the finished excisable goods specified as final in the annexure to the said rule for the purpose of allowing credit of specified duty paid on the capital goods used by the manufacturer in his factory for utilising the credit so allowed towards payment of duty of excise leviable on the final product. The term capital goods has to be defined to mean machine, machinery, plant, equipments used for producing or processing of any goods or for bringing about any change in any substance for manufacture of final products. The argument of the learned DR that the word plant has been construed in a particular manner under the Income Tax Act as mentioned in Anand Theatre’s case. In our view the reliance of the learned DR on Anand Theatre case Supra has misplaced. The word plant construed by the Court for purpose of interpretation of the said word under Section 32 of Income Tax Act is different from the word plant used in Rule 57Q of the Central Excise Rules. The word plant has been provided in Rule only if the same is used for producing or processing of any goods or for bringing about any change. The word used in explanation 1(a) of the rules does not have a word of limitation, when that is the point, it is futile of the learned DR to argue that the said word plant has been construed in a narrow manner. In this connection it is useful to refer to the decision of the Supreme Court in the case of MSCO (Pvt) Ltd v. Union of India 1985 (19) ELT 15 (SC) wherein paragraph 4 the Court held as follows:
“It is hazardous to interpret a word in accordance with its definition in another statute or statutory instrument and more so when such statute or statutory instrument is not dealing with any cognate subject. Craies on Statute Law (6th Edn.) says thus at page 164: “In construing a word in an Act caution is necessary in adopting the meaning ascribed to the word in other Acts. “It would be a new terror in the construction of Acts of Parliament if we were required to limit a word to an unnatural sense because in some Act which is not incorporated or referred to such an interpretation is given to it for the purposes of that Act alone” Macbeth v. Chislett – (1910) A.C. 220, 223.”
7. The interpretation of the word are not construed in the exemption of the notification deriving power of exemption in terms of Section 5A of the Central Excise Act. Modvat rules are issued by the government in terms of Section 37 of the Central Excise Act, which enables the Central Government to make rules to carry the purpose of the act. Moreover in the said case of Jawahar Mills Ltd Supra at page 6 of ELT at paragraph 4 the Court held as follows:
“4. The aforesaid definition ‘Capital Goods’ is very wide. Capital Goods can be machines, machinery, plant, equipment, apparatus, tools or appliances….. Thus, it can be seen that the language use in the explanation is very liberal.”
8. The other cases cited by the learned DR are to be rejected. Each of the cases cited by him are/have been given by the Court and/or the tribunal in a different context. As far as the tribunal decision are concerned it does not take into account the arguments, the reasons which we have given above the non consideration of the argument put before us and therefore these decisions are sub-silentio in nature.
9. Unlike Rule 57A under Rule 57Q the words component, spare parts have been included in explanation to Rule 57Q therefore it cannot be argued that the cement is not a component of the structure. Cement is a movable property which are sold in the market and with the other components like water, sand and gravel in a required quantity and the process of mixing in a proper proportion the structure are made. The said structure are used only in the factory which is used for producing the final product therefore it is futile to accept the interesting argument made by the learned DR. One interesting point came in argument is about the judgment of the Supreme Court in Jawahar Mills Ltd. case 2001 (132) ELT 3 where the Supreme Court had held that the cable is used for producing or processing of finished goods and plant under Clause (a) of explanation (1) of Rule 57Q of the Central Excise Rules. The judgment of the Supreme Court in the said case our view over rules the decision of the Tribunal cited by the learned DR in the following cases that is SPCI v. CCE, 1999 (105) ELT 460: Vivek Alloys v. CCE, 1998 (98) ELT 156: Malvika Steel v. CCE, 1998 (97) ELT 530: Malvika Steel v. CCE, 1998 (99) ELT 86 and Rosa Sugar Works v. CCE, 1999 (114) ELT 950. As far as the other judgments of the Supreme Court is concerned as the same was rendered under the sales tax legislation which is entirely different that the Rule 57Q of the Central Excise Rules. We are not referring to other judgments as we feel the purpose of this case reference to the decision of Jawahar Mills case denied by the Supreme Court is sufficient.
10. The appeal filed by the department is dismissed. We allow the assessee appeal with consequential relief.