Customs, Excise and Gold Tribunal - Mumbai
Industrial Oxygen Co. Ltd. vs Commissioner Of Central Excise And ... on 19 June, 2001
Equivalent citations: 2002(150)ELT751(TRI-MUMBAI)
ORDER
Gowri Shankar, Member(T)
1. The question for consideration in these appeals is the eligibility to the credit specified in rule 57Q for the periods July to November, 1994 in appeal No.E/1908/96 and February to June, 1995 in appeal E/1881/96 of two items in the appellant's factory which manufacture liquid nitrogen/oxygen. The first item is cryogenic tank in which the gases, after their extraction from the atmosphere, and liquefaction, was stored before despatch. The second is tanks to contain sulphuric acid which is one raw material. In the orders impugned int he appeal, the Commissioner has held that these goods do not satisfy the requirement contained in clause (a) of the explanation under rule 57Q(1) that the capital goods must be used to produce or process any goods to bring about any change in the substance for the manufacture of the final products.
2. In its decision in Jawahar Mills Ltd. vs. CCE 1999 (108) ELT 47 the larger bench of the Tribunal had held that for consideration as capital goods the item "need not have a direct nexus in the final products being produced" and it said that "wires and cables to be regarded as plant, being an item not in the nature of consumer goods, but an item having fairly high degree of durability". It had held that wires, cables and such goods are clearly not themselves producing or processing any goods to bring about any change in the capital goods. The goods would therefore be covered by the ratio of this decision.
3. The departmental representative cites before us observations in paragraph 7 of the decision of the larger bench of the Tribunal in CCE, Indore vs. Surya Roshni Ltd. 2001 (96) ECR 286, which reads as follows:-
"7. By Notification No. 11/95-CE dated 16.3.1995, two clauses (d) and (e) were included in the Explanation in Rule 57Q. Ten items were added under clause (d). Under clause (e) certain other items mentioned in Notification No.68/89 which were used in the factory of the manufacturer were also added. Those "capital goods" enumerated in clauses (d) and (e) will also become entitled to Modvat credit from 16.3.1995, even if they were not used for producing the final product or were not used in processing of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final products. In other words, the various items, which were included under clauses (d) and (e), if satisfied any one of the three conditions prior to 16.3.1995, they would have been entitled to the Modvat credit. By the specific inclusion int he notification, which came into force on 16.3.1995, the various items included in clauses (d) and (e) need not satisfy any of the above mentioned three conditions with effect from that date."
4. However, the larger bench was constituted in the light of the conflict that was perceived between these decisions and the decision in Union Carbide India Ltd. vs. CCE 1996 (66) ECR 172, the reasons for the perceived conflict are not indicated. What was the issue before the bench was the correctness of the decision in Jawahar Mills. That being the case, the observation of paragraph 7 would be in the nature of obiter dicta, and would not constitute the ratio of this decision. Therefore the ratio of the decision in Jawahar Mills continues to apply. We have already held that by applying the ratio the goods in question would be capital goods.
5. Appeals are accordingly allowed. Impugned orders set aside. Consequential relief.