Customs, Excise and Gold Tribunal - Mumbai
Avi Photochem Ltd. vs Commissioner Of Central Excise on 1 March, 1997
Equivalent citations: 1997(93)ELT439(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The issue for decision in this appeal is whether densitometer used by the appellant, in his factory for manufacture of photographic chemical is 'capital goods' within the meaning of Rule 57Q.
2. I have heard both sides.
3. The Collector (Appeals), in his order, has held that the densitometer is only used for testing and measuring chemicals used in the manufacture, and is not machines, machinery etc. used for producing or processing of goods or for bringing abovit any change in any substance. The write up of the commodity says that it is vised to check the densities of processed photographic film or paper in solutions where sensitometric tests were involved. It says further that densitometer is used to measure the density of various photographic processing solutions manufactured in the appellant's factory as a means of ensuring that the goods produced possess the required chemical activity needed for photographic process. The film or paper control strips are processed in mixtures prepared on the basis of this method. Optical density of this film or paper are determined by using the densitometer. These densities are compared with densities obtained of the finished goods being manufactured.
3. The densitometer is defined in the Chamber's dictionary of Science and Technology "any instrument for measuring the optical transmission or reflecting properties of a material, in particular the optical density (absorbance) of exposed and processed photographic images". It is thus seen that the appellant uses the densitometer as the means of ensuring that the chemicals manufactured by it are of the required strength and position. It is no doubt true, as the Departmental Representative contends, that the densitometer does not by itself produce or process any goods or bring about any change in any substance. However, it is clear that the densitometer is an essential requisite for manufacture of finished goods in the appellant's plant. It can, therefore, be legitimately considered to be a component of the plant and therefore would be entitled to Modvat credit on that. In view of this, it is not necessary to consider the argument that the goods would qualify as capital goods subsequent to the amendment of rule 57Q enlarging the scope of the term "capital goods" contained in the Explanation and that such amendment was clarificatory in nature and therefore retrospective in application.
4. Appeal allowed. Impugned order set aside. Consequential relief.