ORDER
S.L. Peeran, Member (J)
Page 0251
1. The Revenue is aggrieved with the Commissioner’s (Appeal) Order No. 39/03 CE dated 24.9.2003 extending modvat credit to CRSS sheets used for fabrication of Service Tanks and holding it to be a component of storage tank. He noted that without this item, fabrication of storage tank is not possible. He has relied on the judgments rendered by the Tribunal in the case of Dabur India Limited v. CCE, Meerut reported in 1998 (98) ELT 674 (Trib.), wherein the Tribunal has held that stainless steel tanks has been treated as eligible capital goods for modvat credit, being equipment or part of the plant used for processing of goods. Likewise he has applied the ratio of ruling rendered in the case of J. K. Cement Works v. CCE, Jaipur , wherein plain plates was used for repairing the worn out/broken parts of the kiln have been held to be eligible to modvat credit, as kiln is a part of the plant used for manufacture of excisable goods. He has also taken into consideration the ruling rendered in the case of S.R.F Limited v. CCE, Jaipur , wherein storage tanks used for storing raw materials like hydrofluoric acid, which is corrosive in nature and has to be stored in a specially built tanks for the purpose of manufacture of finished goods, has been held to be eligible for credit under Rule 57Q of CE Rules. He has also noted the ruling of STS Chemical Limited v. CCE, Mumbai-III reported in 2003 (132) ELT 704, wherein credit has been Page 0252 held to be admissible under Rule 57Q of CE Rules, in respect of storage tanks used for finished goods including byproducts, as these tanks have also reached the status of capital goods like the storage of raw materials or semi-finished goods. He has also referred to the Apex Court judgment rendered in the case of CCE, Coimbatore v. Jawahar Mills , wherein the test for considering “capital goods” have been laid down. It has been held that the language used in explanation (1) of the Rule is very liberal and therefore items enumerated in explanation 1(a) and 1(b) are used for any purpose mentioned therein, for the manufacture of final products, then it would satisfy the test of ‘capital goods’. It is also noted that goods specified in explanation 1(c) for availing modvat credit as capital goods need not be used in the manufacture of final product. The only requirement is that they should be used in the factory of production. It is also noted that capital goods can be machinery, machines, plant equipment, apparatus, tools or appliances. Therefore, the Commissioner (Appeal) has allowed the assessee’s claim, which is challenged in this appeal.
2. The Revenue contended that the CRSS sheets used for manufacturing of Service Tanks are neither machinery nor components, spare parts and accessories covered under (a) (b) and (c) of Rule 57Q and hence, credit is not available.
3. We have heard the learned SDR and the learned Counsel in the matter.
4. The learned Counsel relied on the ratio of the following rulings.
(i) Devyani Beverages Ltd. v. CCE. Meerut – 1999 (33) RLT 73 (CEGAT).
(ii) CCE v. Industrial Oxygen – 2004 (175) ELT 907
(iii) CCE v. Kalyani Seamless Tubes – 2004 (176) ELT 899
The learned Counsel submits that the judgments cited by the Commissioner directly apply to the facts of the case and he prays for the dismissal of the appeal.
5. On a careful consideration, we notice that the Commissioner has rightly considered the test to be applied for treating an item for grant of credit. The ratio of all the judgments noted by him decides the issue in assessee’s favour. The citations referred to by the Counsel, which are cited (supra) also applies to the facts of this case, as without the CRSS sheets, the Service Tanks cannot be manufactured and the Service Tanks are essential for the purpose of storing oils/fatty acids before feeding the same to the Soap Crutcher. Therefore, the reasoning given by the Commissioner is in terms of law. There is no merit in this appeal and the same is rejected.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)