ORDER
Shri S.L. Peeran
1. By this appeal, appellants have challenged the validity and correctness of Order-in-Appeal No. 518/98 (M-III) dated 29.12.98 by which the Commissioner (Appeals) has confirmed the rejection on modvat credit on capital goods which, according to them, are not exclusively used for manufacture of items falling under chapter sub-heading 5202.00. It has been pleaded by the assessee that said set of machines which are used for production of cotton yarn are also used for production of polyester yarn falling under chapter 55; that the period involved was transitional period; that the notification No. 60/94-CE (NT) dated 21.10.94 was clarificatory in nature and therefore has retrospective application; that to avoid breakage in the yarn and consequential wastage, the humidifier was installed in the spinning section.
2. The Commissioner rejected their plea on the ground that the items which are preparatory machines used to produce intermediate goods carded/combed machine falling under sub-heading 5202.00 are not eligible for the benefit of modvat credit as capital goods.
3. I have heard both sides in the matter and considered the submissions. It is noticed that in large number of appeals coming up before this Bench, the matters have been remanded for de novo consideration with specific directions as to how the matter is required to be re-adjudicated. One such order is CCE Coimbatore Vs SAMBANDAM SPINNING MILLS & 6 others by final order No. 335 to 341/2001 dated 27/2/2001. In this order, the Tribunal has noted the Larger Bench judgement decided in the case of CCE Vs SURYA ROSHINI LTD. reported in 2000 (128) ELT 293 wherein the scope of capital goods has been discussed by the larger bench comprising of five member of the Tribunal. It has been noted that the Notification No. 60/94 is clarificatory in nature and it was issued to remove doubt which was in existence. The Tribunal has also noted other judgements in this case like larger bench judgement of JAWAHAR MILLS – 1999 (108) ELT 47; J.K. SYNTHETICS – 1996 (88) ELT 785; MARVEL VINLYS LTD. Vs. CCE reported in 1997 (90) ELT 361. The Tribunal has noted that a similar remand order has been made in the case of CCE Vs SURAT SPINNING MILLS 2000 (117) ELT 699. After noting all these judgements, the Tribunal has remanded the matter to the original authority to re-determine the case in the light of large bench judgement noted and also other judgements, wherein, the Tribunal has laid down as to how capital goods are required to be treated. In that view of the matter, I find that the impugned order has not been passed in the correct perspective and within the definition of capital goods. Therefore in terms of the judgement cited the impugned orders are set aside and matter remanded to the original authority for de novo consideration in the light of cited judgement and are apprise of the entire matter after granting opportunity to the assessee in the matter. Appellants are entitled to raise all pleas which them deem fit to support their plea that preparatory machines are required to be treated as capital goods. Ordered accordingly.
(pronounced and dictated in open court)