Customs, Excise and Gold Tribunal - Tamil Nadu
M/S. Varalakshmi Sugars Ltd. vs Cce, Hyderabad on 3 August, 2001
Equivalent citations: 2001(77)ECC538
ORDER
Shri Jeet Ram Kait
1. These stay applications have been filed for grant of waiver of pre-deposit of duty and penalty involved in this case. Since I propose to dispose of the appeals themselves today as the issue lies in a short compass, I grant waiver of pre-deposit of duty and penalty pending disposal of the appeals.
2. these appeals are directed against the order in Appeal No. E/269 to 271/2000 (V) CE dated 22.12.2000 passed by the Commissioner of Central Excise & Customs (Appeals), Hyderabad by which the Commissioner (Appeals) denied them the benefit of Modvat Credit on the following capital goods:
(a) PVC Pipes and fittings and HDPE Pipes and tubes.
(b) Staging Structural material/centrifugal machinery.
(c) MS Plates
(d) Slag Wool
(e) MS Tanks and accessories.
(f) Corrugated sheets.
(g) Ceramic Fibre Blankets
(h) AAC conductors.
3. The learned Counsel for the appellants submitted that this is the second round of appeal as the appellants had preferred appeal before the Commissioner (Appeals), Hyderabad in Appeal No. E/138/98 against order in Original No. 15/98 dated 20.2.98 and their appeal was dismissed vide order in Appeal No. 25/98 dated 16.9.98 on the ground of time bar. The appellants thereafter filed appeals before the Tribunal and the Tribunal vide final order No. 347/99 dated 15/2/99 set aside the order in appeal and remanded the matter for de novo consideration of the matter by the Commissioner (Appeals) and the Commissioner (Appeals) decided the matter by his order dated 22.12.2000 against which the present appeals have been filed. The appellants contended that the lower appellate authority has failed to consider the various submissions and the evidence on record as the capital goods have been employed within the factory of production and there is no bar in allowing the benefit of Modvat Credit to the appellants. In this connection they have stated that in spite of their detailed submissions made before the original authority as well as before the lower appellate authority, Modvat credit has been disallowed to them.
4. Shri MV Raman, learned Counsel for the appellants submitted that Modvat Credit on PVC pipes and fittings is available and the Tribunal has taken a decision that PVC pipes and fittings are covered as capital goods under Rule 57Q and Modvat Credit is available and he cited the judgement of this Tribunal in the case of CCE Chennai vs. Pepsico (India) Industries Ltd. reported in 2001 130 ELT 193 (Tribunal).
5 . As regard Staging structural material he submitted that the benefit of Modvat Credit is admissible as held by the North Regional Bench of the Tribunal in the case of JK Cement Works vs. CCE reported in 2001 (125) ELT 480 (T). As regards Centrifugal machinery, he submitted that the machinery cannot stand without the supporting structure and they are used in relation to the manufacture of the final product. Therefore, Modvat Credit is admissible on both the items i.e. staging structural material as well as on centrifugal machinery.
6. As regards MS Plates and chequered plates the learned Counsel submitted that Modvat Credit on these items has been held to be admissible by the East Regional Bench, Calcutta in the matter of Crystal Cable Industries vs. CCE Calcutta-II reported in 2000 (124) ELT 1117 (T).
7. as regards Slag wool, he submitted that slag wool serves as insulator material and therefore is used in relation to the manufacture of the final product and therefore, the same is admissible for Modvat Credit.
8. As regards MS Tanks and accessories, he invited my attention to the Tribunal judgement in the case of Kisan Sahkari Chini Mills Ltd. reported in 2000 (124) ELT 295 (T). He also invited my attention to the judgement of the Tribunal in the case of Search Chem Industries reported in 2000 (118) ELT 608 (T) of the North Regional Bench wherein it has been held that Mild Steel tank for water storage, HDPE storage tank and chilled water tank are capital goods and Modvat Credit is admissible on this item.
9. As regards corrugated sheets made of asbestos, they are used as covering for the pipes and heat exchangers.
10. As regards, Ceramic fibre blankets, he submitted that credit is admissible as held by the North Regional Bench in the case of DAGA Ceramics Pvt Ltd. Vs. CCE, Jaipur reported in 2000 (1117) ELT 313 (T).
11. As regards, AAAC Conductors he submitted that they are nothing but wires and cables used as conductors. In this connection he submitted that wires and cables have been held to be admissible for benefit of Modvat Credit as capital goods by the larger bench in the case of Jawahar Mills vs. CCE as reported in 1999 (108) ELT 47 and also in the case of CCE Indore vs. Surya Roshini Ltd reported in 2001 (128) ELT 293 (Tri-LB) and in the case of SIV Industries Ltd vs. CCE as reported in 2001 (129) ELT 48. He has therefore prayed that the impugned order may be set aside and the appeals allowed with consequential relief.
12. Shri A. Jayachandran, learned DR for the Revenue while reiterating the view taken in the impugned order, submitted the corrugated sheets of asbestos are used as such for covering the heat exchanger and they are not used in or in relation to the manufacturer of the final product and hence the item is not eligible for Modvat Credit. As regards, staging structural material, he submitted that these are supporting structural for supporting the machinery to stand without vibration and other parts and are therefore not admissible for Modvat Credit.
13. I have carefully considered the submissions made by both the sides. I find that Modvat Credit is admissible to all the above items except corrugated sheets made of asbestos as they are used as covering the heat exchanger and hence it cannot be said that this item is used in or in relation to the manufacture of the final product. I observe that the learned Counsel for the appellants has demonstrated with various judgements that Modvat Credit is admissible to all the items except corrugated sheets. Therefore, following the ratio of the various cited judgements, I hold that Modvat Credit is admissible to all the items except corrugated sheets. The impugned order stands modified to the extent indicated above and the appeals are allowed in the above terms.
14. The learned Counsel at this stage showed me a copy of the mahazar dated 24.7.2001 in which 400 bags of sugar have been seized. Therefore, he prayed for issue of copy of this order on or before 8.8.2001 to enable the party to get the sugar released.
15. The Registry is directed to issue copy of this order by 8.8.2001.
(Dictated and pronounced in open Court)