ORDER
V.K. Agarwal, Member (T)
1. The issue involved in this appeal filed by appellants is whether storage tanks for the purpose of storing Hydrofluoric Acid are capital goods within the meaning under Rule 57Q of the Central Excise Rules.
2. Arguing on behalf of the Appellants the ld. Counsel submits that the Appellants manufacture chemicals and one of their main raw-material is Hydrofluoric Acid which is highly corrosive in nature, hazardous and chemically poisonous. In support of his contention he relied upon Hawley’s Condensed Chemical Dictionary in which it is mentioned that Hydrofluoric Acid is corrosive material and highly corrosive to skin. He said that therefore it has to be stored in a specially built tank because it has to be stored under specific temperature and certain pressure. In the market the tanks meant for Hydrofluoric Acid are specifically available and it cannot be stored in any other tanks. Unless the tanks installed in factory for the purpose of Hydrofluoric Acid the appellants cannot manufacture their finished goods and accordingly it should be considered as capital goods for the purpose of availing of Modvat credit. He submits that the Appellate Tribunal in the case of Lupin Laboratories Ltd. v. C.C.E., Indore reported in 1998 (25) R.L.T. 740 (CEGAT) has held that…Pollution Control equipments FRP tank for HBR Scrubber, Bin (tank) used for storage of vapour of Toxic/Hazardous solvents are capital goods under Rule 57Q of the Central Excise Rules. They also placed reliance on the decision in the case of Lupin Laboratories Ltd. v. C.C.E., Indore vide Final Order No. A/2-4/98-NB(SM), dated 30-12-1997 [1998 (100) E.L.T. 52 (Tribunal)] in which the capital goods credit was allowed in respect of cylinders specifically designed to store different types of gases. He submits that once the Appellate Tribunal has allowed the capital goods credit in respect of cylinders as well as ordinary tanks for storing of solvents, storage tanks used by the Appellants are eligible capital goods. He further mentioned that the definition of the capital goods used the terms machine, machinery, plants, equipments etc. and these terms had not been defined in the Central Excise Rules. It has been held by the Court that the Income Tax Act, Sales Tax Act and Central Excise Act are pari materia and decisions in Income Tax Act/Sales Tax Act can be referred to for finding out a definition of any expression which is not given in any particular act. He relied upon the decision in the case of C.I.T. v. Electro Magnetical Works Pvt. Ltd. -1994 (207) I.T.R. 494 in which it was held that if the equipment cannot function without a particular structure it should be considered as a part of the plant. He also placed reliance on the decision of the Supreme Court in the case of C.C.E. v. Rajasthan State Chemical Works reported in 1991 (55) E.L.T. 444 in which the Supreme Court came to the conclusion that process like handling, lifting, pumping and transportation of the raw-materials is also a process in or in relation to the manufacture if integrally connected with further operation leading to the manufacture of the goods.
3. Countering the arguments, Shri A.M. Tilak, ld. DR submitted that the definition of the capital goods as given in explanation to Rule 57Q is not an inclusive definition whereas the definition in Income Tax Act is inclusive one. The word used in Central Excise Rules while defining capital goods is “means” and as such to qualify for the capital goods credit, the particular goods should fall within the scope of the definition. He also mentioned that applying the Rule of interpretation “ejusdem generis”, the word plant used in the definition of capital goods will not cover tanks. He relied upon the decision in the case of Delhi Cold Storage (P) Ltd. v. C.I.T. – 1991 (4) S.C.C. 239. He submitted that process and processing are two different terms. Process involves bringing into existence a different substance. He submits that the storage tank does not make any change in the goods which is stored in it. He has also placed reliance on Calcutta High Court decision in Singh Alloys & Steel Ltd. v. Assistant Collector -1993 (66) E.L.T. 594 (Cal.) in support of his contention that the term plant cannot be given an extended meaning. He also placed reliance on the decision in case reported in 45 T.C. 221 according to which plant is restricted to moveable parts.
4. In reply the ld. Advocate submitted that the Appellate Tribunal has been taking constantly the views that the capital goods under Rule 57Q has to be given wider meaning and whatever is necessary for the manufacture of finished goods will be covered by the said term. He also mentioned that processing is a much wider term and that is why it has been used in the definition of the capital goods and will cover each and everything that helps in the manufacture of finished goods. He placed reliance on the decision reported in 1980 (126) I.T.R. 197 (Delhi). The relevant test to be applied is whether does the goods fulfil the purpose of the assessee. He also relied upon the Supreme Court judgment in the case of IFFCO v. U.O.I. -1996 (86) E.L.T. 177 (S.C.) in which effluent plant was considered to be part of the manufacturing plant. Finally, he relied upon the decision in the case of Dabur India Ltd. v. C.C.E., Meerut, Order No. A-833/97-NB(SM), dated 14-10-1997 [1998 (98) E.L.T. 674 (Tribunal)] in which also the capital goods credit was allowed in respect of tanks.
5. I have considered the submissions made by both sides. It has been submitted that the storage tanks in question is used for storing one of the raw-materials of the appellants namely Hydrofluoric Acid. The question is whether this storage tank is covered by the definition of the capital goods or not. It is observed that the Appellate Tribunal not in one case but in many cases has considered the eligibility of tanks for the purpose of capital goods credit under Rule 57Q. In Lupin Laboratories Ltd. – 1998 (25) R.L.T. 740 (Tribunal), after referring to the case laws relied upon by the appellants herein, has allowed capital goods credit not only in respect of the FRP Tanks which is used for storage of vapour of toxic solvent but also in respect of Bin (Tanks) which were used for storage of solvents. I am not convinced of the arguments of the ld. DR that the Tribunal in that case has not decided about the eligibility of the tanks specifically. When the Tribunal has allowed the capital goods credit in respect of items including the storage tanks after considering the various case laws, it cannot be said that the Tribunal has not given the dear findings on the matter. It is also seen that the Appellate Tribunal in the case of Lupin Laboratories Ltd. Order No. A/2-4/98-NB (SM), dated 30-12-1997 [1998 (100) E.L.T. 52 (Tribunal)] has allowed the capital goods credit in respect of cylinders/The ld. DR has emphatically tried to distinguish this decision with the present case contending that the cylinders were used for storing liquid and gases which were used to provide desired flow and pressure during the process of manufacture of bulk drugs. In the present case also Hydrofluoric Acid which is corrosive in nature has to be stored in specially built tanks for the purpose of manufacture of the finished products. In the light of these facts and following the decisions cited above, I hold that the storage tanks in the present appeal is covered by the definition of capital goods and Appellants are eligible to avail capital goods credit. Accordingly appeal is allowed.