Customs, Excise and Gold Tribunal - Tamil Nadu
Steel Authority Of India Ltd. vs Commissioner Of Central Excise on 7 November, 2002
Equivalent citations: 2003(86)ECC251
JUDGMENT S.L. Peeran, Member (J)
1. The appellants, Public Sector Undertaking, has challenged the rejection of Modvat Credit in respect of some of the capital goods by the Commissioner (Appeals) in order in appeal No. 413/97 dt. 9.10.97. The items on which Modvat credit has been rejected are as under:
(a) Refractories
(b) Steel Structures, Steel Castings, G.P. Sheets, Nuts Screws, Washers, Foundation Bolts, Fixed and Sliding Supports.
(c) Components for ventilation system to the motor room
(d) Cable Trays, Painted anlge ladder type cable trays etc.
(e) Ganvanised flats
(f) KWH Meter
(g) Telecommunication cables
2. We have heard the Representative Shri Rangarajan, Dy. Chief Manager for the appellants and Shri C. Mani, Ld. DR for the Revenue.
3. The Representative has filed a written submission along with a set of case laws and submitted that each of the item noted above is covered by the judgment of the Hon'ble Apex Court and the Tribunal. In all the above items, benefit of Modvat credit has been granted after due examination. He submitted that these judgments are to be applied and the Modvat benefits to be extended.
4. Shri C. Mani, Ld. DR has submitted that the Apex Court has decided the aspect pertaining to the Modvat credit in the case of Jawahar Mills Ltd. The Tribunal has also dealt with the matter. He reiterates the departmental view.
On a careful consideration, we notice that in respect of
(a) REFRACTORIES:
The following judgments have been referred to, holding the said item to be entitled to the benefit of Modvat credit.
(i) CCE, Hyderabad v. Panyan Cements, Mineral Industries Ltd. 2000 (115) ELT 797 (T) wherein it has been held that the refractory bricks are included in the definition of capital goods and the benefit is required to be extended to the refractory bricks as the Notification No. 11/95-CE is clarificatory in nature, This matter was also examined in the case of CCE v. Birla Jute & Industries Ltd. 2001 (135) ELT 280 (T). This decision has been upheld by the Hon'ble Apex Court. The Tribunal in the case of CCE, Raipur v. Beekay Engineering & Casting Ltd. 2002 (139) ELT 704 (T) has held that the lining materials are used to prevent escape of heat from furnace and ensures optimum use for manufacture of final products are eligible for the benefit of Modvat Credit.
(b) Steel Structures. Steel Castings. GP. Sheets, Angles. MS Sheets. Bolts, Nuts Screws, washers. Foundation Bolts. Fixed and Sliding Supports.
These items have also been held to be eligible for the Modvat credit in terms of the Tribunal decision rendered in the case of Simbhaoli Sugar Mills Ltd. v. CCE, Meerut 2001 (135) ELT 1239 (T). We notice from the Commissioner's order that there is no denial that these items are being used in the manufacture of final product and have been used as parts of the hot rolling mills for production of hot rolls and cooling tower, and shapes. A detailed discussion by the Commissioner indicates that these items have been used in the manufacturing of the process. Therefore, the Modvat benefit cannot be denied. The decision of the Tribunal in the case of CCE v. Birla Jute & Industries Ltd. 2001 (135) ELT 280 is also applicable to the facts of the case. Likewise, the Tribunal has also held that in the case of Search Chem Industries Ltd. v. CCE Surat, 2000 (118) ELT 680 (T) that fittings for plant equipment comprising nuts, bolts, and others, and structurals said to be required to keep the machinery in place are required to be granted the benefit of Modvat Credit.
(b) COMPONENTS FOR VENTILATION SYSTEM TO THE MOTOR ROOM.
The Tribunal has held in the case of Jawahar Mills Ltd. v. CCE 1999(108) ELT47 that Humidifiers used in the textile mill to control the humidity in the atmosphere and to maintain certain humidity in the mills is an item used in the manufacture of goods or processing of goods for sale. The item components for ventilation system to the motor rooms for the Hot Rolling Mill project are to be protected from over-heating to avoid malfunctioning of electric motor. In the light of the Tribunal Rulings the benefit has to be granted to this item also. The Tribunal in the case of Malvika Steel Ltd. v. Manikgarh Cement v. CCE, Napur 2001 (136) ELT 1085 (T) granted the benefit of Modvat credit in respect of electrical transformer, instrument cooling fan type, impeller shaft/FRB Rear, ICWT Track, F/E, spare for fluidomat, fluid coupling, shear pulley, super refractories essentially components of plant without which the finished* goods cannot be manufactured though not directly used in the manufacture of the item. Likewise, the Tribunal granted the benefit of Modvat credit to the Fibre Bulk used for cooling down temperature of hot clinker are eligible for Modvat in the case of Century Cements Ltd. v. CCE, Raipur 1997 (95) ELT 655 (T).
We notice that the ratio of this judgment would apply to the items in question.
(c) CABLES. TRAYS. PAINTED ANGLE LADDER TYPE CABLE TRAYS ETC.
It is seen from the impugned order all these items are used in the manufacture of final product.
Likewise the benefit has to be extended to Galvanised flats which are used for earthing various electrical equipments as a basic safety and statutory requirement in the light of the ratio of the Apex Court judgment rendered in the case of Jindal Strips Ltd. 2002 (139) ELT A. 190.
(f) KWH METER These items are used in measuring power consumption and is in a nature of measuring equipments and the benefit is required to be granted in the light of the Tribunal decision rendered in the case of Autoline v. CCE, Bangalore 2001 (130) ELT 952 (T) where in the Tribunal has granted the benefit to the measuring instruments.
(g) TELECOMMUNICATION CABLES:
These items are required for pertaining control equipment and date processing machines used in operation of the equipments and hence they are held to be entitled to the benefit of Modvat credit in the light of the Apex Court judgment rendered in the case of Jawahar Mills Ltd. v. CCE, Coimbatore. In view of the above citations of each of the terms noted above, we uphold the assessees claim and grant the benefit of Modvat to them by allowing the appeal with consequential relief, if any, as per law.