Customs, Excise and Gold Tribunal - Tamil Nadu
Chemplast Sanmar Ltd. vs Cce on 18 June, 2003
Equivalent citations: 2003(111)ECR500(TRI.-CHENNAI), 2004(177)ELT446(TRI-CHENNAI)
ORDER S.L. Peeran, Member (J)
Case Note:
Held: Modvat - Capital goods--Denial of Credit in respect of (1) Seals and seals spares; (2) Rubber lining; (3) Adhesives; (4) Neoprene hose connector; (5) Indion; (6) Transformer oil; (7) Gasket and gasket spares; (8) Hydrogen gas cylinders; (9) Light fittings; (10) Tubular Type Marcooler; (11) Bolts & Nuts; (12) Chlorine Cylinder Valves; (13) Paceman styles & (14) Hakhaw Blades--Modvat Credit is admissible in respect of all the fourteen items, as per the ratio of the various decisions of the Tribunal cited by the assessee--Impugned orders denying the credit are set aside and the assessee's claim allowed.
2. Modvat - Capital Goods--(1) Switch Gear; (2) Grid Element; (3) Bibbly Resilient Coupling; (4) Sensitive Balance; (5) Spares for Pump and Xomox valve; (6) Glass Tube Rotameter; (7) Valves, Spares Drive Ring, Valve Rings, Diaphragm valves; (8) Analog Input Enunciator Titanium Thermowell; (9) Turbo charger; (10) Impeller; (11) Agitator; (12) Filtering equipment; (13) PVC Cables; (14) Energy Conservation Equipment; (15) Glass Filled PTFE Rod; (16) Pipes, Flanges; (17) Computer Parts; (18) Push Rods & (19) Glass tube Rotameter--Benefit of credit granted is as per the ratio of the Apex. Court's judgment which clearly applies to the facts of the case in respect of the 19 items. Impugned orders upheld.
Assessee's appeals allowed.
Revenue appeals dismissed.
ORDER S.L. Peeran, Member (J)
1. The assessee and the revenue are both aggrieved with the Order-in-Appeal No. 204 & 205/98 dated 24.12.1998 passed by CCE (Appeals) Trichy as the assessee is contesting the rejection of their claim for modvat credit in respect of certain items and the Revenue is contesting for grant of credit on certain items. The Commissioner's finding recorded in paras 3 8s 4 on these items on which he has granted and rejected the claim is produced as under:
3. I have gone through carefully the facts of the case and the submissions made by the appellants. The lower authority has denied the credit in respect of the following machinery/ components/ spares:
Switch gear, Tubes of plastics, valves, spare drive ring, valve rings and diaphragm value, seals, seal spares, rubber tining. Analog input annunciator. Neoprene Hose connectors. Turbo charger, Impeller, adhesive, Cement, Agitator, Sensitive balance, Transformer oil, Titanium Thermowell, Filter element cartridge, PVC cable, spares for pumps, Xomox valve, energy conservation equipment, Glass Filled PTFE rod. Grid element and Bibby resilient couplings. PVC pipes, wire braided steam hose, Rubber hose assessory, Pipes, Tubular type marcooler fan, flanges, hacksaw blades, bolts and nuts, chlorine cylinder valves, Paceman styles, Equipment for HCL absorption, Fork lifts and spares., Iron rods, Computer parts, Hydrogen gas cylinders, light fittings, Oaskot and gaskol spares, push rod Indian galss tube rotametor.
It would be seen from the above list that all the above items are falling within the definition of capital goods except the following:
Seals and seal spares, paceman styles, Hacksaw blades, rubber lining, adhesives, Neopreme Hose connectors, Indion, Transformer oil, gasket and gasket spares These are all falling under the category of consumables and therefore not covered within the definition of capital goods under Rule 57Q Iron Rods and Cement : These are used for civil construction work of the building or in the construction of supports to hold the equipments at proper places and hence these are not capital goods for the purpose of Rule 57Q and its value is also not included in the assessable value of the final product. Hence these are not capital goods within the meaning of Rule 57Q.
Light Fittings : These are electrical fittings used for lighting purpose and hence these are not capital goods under Rule 57Q.
Tubular type marcooler fan with starter : These are used as spares in the air conditioning to keep the product at the required temperature. Since the goods are classifiable under Sub-heading 8414.00 and used in the air conditioning plant, credit of duty is not admissible under Rule 57Q.
Bolts and Nuts : Bolts and Nuts do not fall within the category of capital goods. These are merely required for fixing machines etc., Chlorine cylinder value : These are used in cylinder. Cylinders are used for packing and hence these are not capital goods falling within the scope of Rule 57Q and therefore, the valves used in cylinders are also not capital goods.
Indion: It is used to remove minerals present in the process water. It does not fall within the definition of capital goods.
Spares for Pumps and Xomox Valves : The lower authority has denied the credit on the ground that they had taken the credit on the basis of invoices which were not in the name of the manufacturing unit. However the appellants contended that the orders for the capital goods were placed by their Head Office directly and the consignor mentioned the name of M/s. Chemplast, Plant-II instead of Chemplast. Plant-Ill. Since the order for capital goods was placed by their Head Office and the duty paid nature of the capital goods was not in doubt, the denial of the credit by the lower authority was not correct. Credit of duty of Rs. 3635/- on the spares for pumps and Xomox values is therefore, admissible to them.
4. In view of the above, the appeals are party allowed and the orders passed by the lower authority modified to the above extent.
2. Ld. Counsel Shri Anand has filed a tabulated case-law along with the goods on which the Tribunal and the Apex Court has considered the matter and has held the item to be modvatable. He has also filed a tabulated case-law along with the goods in the Revenue's appeals in which grant of modvat credit has been held to be justified. Therefore, he submits that as the issue is covered in their favour in respect of all the items, the Revenue's appeals be rejected and their appeals be allowed. The Table of Case-Law & Goods furnished by the assessee in both the appeals is extracted herein below:
Chemplast Sanmar Ltd., Chennai v. CCE, Tiruchirapalli Table of Case Law and Goods ________________________________________________________________ Sl. Goods Case Law No. ________________________________________________________________
1. Seals and seals a) CCE v. Jawahar Mills Ltd. 2001 (132) spares ELT 3 (SC) : 2001 (97) ECR 541 (SC)
b) Synthetics & Chemicals v. CCE 1999 (111) ELT 705 (T)
c) CCE v. Tiwari Sugar Complex 1998 (102) ELT 750 _______________________________________________________________
2. Rubber lining a) CCE v. Kothari Sugars Ltd. 2001 (136) ELT 1071
b) Lalji Board Industries v. CCE 1999 (82) ECR 775 (T) _______________________________________________________________
3. Adhesives CCE v. Chemplast Sanmar 2001 (45) RLT 440 (T) : 2001 (98) ECR 104 T _______________________________________________________________
4. Neoprene house a) CCE v. Birla Jute Inds. Ltd. 2002 connector (139) ELT A 93
b) CCE v. Chemplast Sanmar 2001 (45) RLT 440 (T)
c) CCE v. Surya Roshni Ltd. 2001 (128) ELT 293 : 2001 (96) ECR 286 (T) ________________________________________________________________
5. Indion a) MALCO v. CCE 2001 (136) ELT 192 (T)
b) CCE v. Goodyear India Ltd. 2000 (124) ELT 319 ________________________________________________________________
6. Transformer Oil a) CCE v. Birla Jute & Inds. Ltd.
2002 (139) ELT A 93
b) CCE v. Modi Rubber Ltd. 2000 (119) ELT 197
c) CCE v. Surya Roshni Ltd. 2001 (128) ELT 293 (T) ________________________________________________________________
7. Gasket and gasket a) 2000 (116) ELT 579 (T) spares
b) CCE v. Surya Roshini Ltd. 2001 (128) ELT 293 (T)
c) CCE v. Tiwari Sugar Complex 1998 (102) ELT 750 _______________________________________________________________
8. Hydrogen gas a) Spic v. CCE 2002 (150) ELT 84 (T) cylinders
b) 2001 (137) ELT 633 (T) - CCE v.
Hukumchand Jute India Ltd.
c) CCE v. Hukumchand Jute India Ltd.
2000 (41) RLT 322 (T)
d) NRC Ltd. v. CCE 2001 (137) ELT 362 (T) : 2001 (97) ECR 371 (T)
e) Lupin Laboratories v. CCE 1998 (100) ELT 52 (T) ________________________________________________________________
9. Light fitting National Standard Dunlen v. CCE 2001 (136) ELT 113 (T) ________________________________________________________________ Appeal No. E/635/99 Chemplast Sanmar Ltd., chennai v. CCE, Tiruchirapalli Table of Case Law and Goods ______________________________________________________________ Sl. Goods Case Law No. ______________________________________________________________
1. Tubular type a) CCE v. Spic 2001 (138) ELT 929 (T) Marcooler Approved in 2001 (132) ELT 3 (SC)
b) CCE v. Tables India 2001 (138) ELT 1436 (T)
c) CCE v. Sweety industries 2001 (133) ELT 492 (T) ______________________________________________________________
2. Bolts & Nuts CCE v. Birla Jute & Industris Ltd.
2001 (135) ELT 280 (T) Affirmed in 2002 (139) ELT A 93 ______________________________________________________________
3. Chlorine Cylinder a) CCE v. Chemplast Sanmar 2001 45 Valves RLT 40 (T)
b) Spic v. CCE 2002 (150) ELT 84 (T) ______________________________________________________________
4. Paceman styles a) Polyplex Corporation Ltd. v. CCE 2000 (115) ELT 87 Affirmed in 2001 (132) ELT 3 (SC) : 2000 (88) ECR 675 (T)
b) CCE v. Chemplast Sunmar 2001 (132) ELT 504 (T) : 2001 (98) ECR 104 (T) _______________________________________________________________
5. Hacksaw Blades Batliboi & Co. v. CCE 1998 (97) ELT 108 (T) : 1998 (75) ECR 18 (T) _______________________________________________________________ Appeal No. E/622/99 & 630/99 CCE, Tiruchirapalli v. Chemplast Sanmar Ltd. Chennai Table of Case Law and Goods ______________________________________________________________ Sl. Goods Case Law No. ______________________________________________________________
1. Switch Gear a) CCE v. Jawahar Mills Ltd. 2001 132 ELT 3 (SC)
b) Nahar International v. CCE 2000 123 ELT 767 (T)
c) CCE v. Pittie Cement 1999 112 ELT 1050 (T)
d) Kanoria Chemicals v. CCE 1997 95 ELT 301 (T) ______________________________________________________________
2. Grid Element a) CCE v. Jawahar Mills Ltd. 2001 132 ELT 3 (SC)
b) CCE v. Steel Strips Ltd. 2002 (149) ELT 1291
c) ACC Ltd. v. CCE 2002 (147) ELT 433 : 2002 (102) ECR 347 (T) _____________________________________________________________
3. Bibbly Resilient a) CCE v. Jawahar Mills Ltd. 2001 Coupling (132) ELT 3 (SC) _____________________________________________________________
4. Sensitive Balance _____________________________________________________________
5. Spares for a) CCE v. Chemplast Sanmar Ltd.
pump and 1999 (111) ELT 247
Xomox valve b) Larsen & Toubro Ltd. v. CCE
1994 (72) 948 (T)
_____________________________________________________________
6. Glass tube a) CCE v. Chemplast Sanamar Ltd.
rotameter 1999 (111) ELT 247
b) Larsen & Toubro Ltd. v. CCE
1994 (72) 948 (T) : 1994 (53)
ECR 595 (T)
____________________________________________________________
7. valves, Spares a) CCE v. Birla Jute & Inds. Ltd.
Drive Ring, 2002 (139) ELT A 93
Valve rings, b) CCE v. Chemplast Sanmar 2001
Diaphragm (132) ELT 504 (T)
valves
____________________________________________________________
8. Analog input a) Mahar Cement v. CCE, Raipur enunciator 2002 (125) ELT 629 Titanium b) Geep Industrial Syndicate v.
Thermowell CCE 1996 (88) ELT 753 _____________________________________________________________
9. Turbo charger a) CCE v. Surya Roshni 2001 (128) ELT 293 (T-LB)
b) DLF Cement v. CCE 2000 (115) ELT 743 (T) _____________________________________________________________
10. Impeller a) CCE v. Manikgarh Cement 2002 143 ELT A 181
b) CCE v. Raja Ram Maize Products 2000 (118) ELT 171 (T) _____________________________________________________________
11. Agitator a) CCE v. Birla Jute & Inds. Ltd.
2002 (139) ELT A 93
b) Crompton Greaves Ltd. v. 2002 (139) ELT 101 (T) : 2002 (105) ECR 435 (T)
c) CCE v. Laxmi Precision Screws Ltd. 2001 (132) ELT 310 (T) _____________________________________________________________
12. Filtering a) CCE v. Surya Roshni 2001 (128) equipment ELT 293 (T)
b) Maihar Cement v. CCE 2000 (125) ELT 629 (T) _____________________________________________________________
13. PVC Cables a) CCE v. Surya Roshni 2001 (128) ELT 293 (T-LB)
b) CCE v. Jawahar Mills Ltd. 2001 132 ELT 3 (SC)
c) CCE v. Indore v. Flex Industries 1999 (113) ELT 425 (T) _____________________________________________________________
14. Energy a) CCE v. Carborundum Universal Conservation 2001 (130) ELT 752 (T) equipment ______________________________________________________________
15. Glass filled a) Lupin laboratories v. CCE 1998 PTFE Rod (100) ELT 52 (T)
b) Malco v. CCE, Coimbatore 2001 (136) ELT 182 _______________________________________________________________
16. Pipes, Flanges a) CCE v. Surya Roshni Ltd. 2001 (128) ELT 293 (T)
b) CCE v. Birla Jute & Inds. Ltd.
2002 (139) ELT A 93
c) CCE v. Chemplast Sanmar Ltd. 2001 (132) ELT 504 _______________________________________________________________
17. Computer parts a) Vindhya Telelinks 2000 (116) ELT 528 (T)
b) Siel Sugars v. CCE Meerut 1998 (99) ELT 54 (T) : 1998 (74) ECR 669 (T) _______________________________________________________________
18. Push Rods a) CCE v. Surya Roshni 2001 (128) ELT 293 (T)
b) JCT Electronics v. CCE 200 (124) ELT 541 (T) ________________________________________________________________
19. Glass tube a) Century Cement Ltd. v. CCE 1997 rotameter (95) ELT 655 (T)
b) CCE v. JCT Electronics 2001 (124) ELT 541
c) Grasim Cement v. CCE 1997 (96) ELT 354 ________________________________________________________________
3. Ld. DR Shri P. Devaludu points out to the grounds of appeal wherein Revenue contends that for grant of modvat credit, the items have to satisfy the definition of "Capital Goods" inasmuch as that they are required to be utilized for manufacture of final goods. He takes us through the grounds of appeal made out in respect of each of the items and pointed out that they do not satisfy the explanation to Rule 57Q of CER' 1944 as it stood during the relevant period.
4. After taking us through all these grounds, he contests the grant of modvat credit on the items and seeks for setting aside the same. However, on pointing out to various judgements which have been relied by the Counsel, Ld. DR submits that he verified the judgments and submits that the Tribunal and Apex Court have rendered the same if favour of the assessee. However, he reiterate the departmental view for rejection of modvat credit on those items.
5. On a careful consideration of the submissions, and on a perusal of the impugned order, we notice that the Commissioner (Appeals) has not rightly granted the benefit of modvat credit in respect of the items claimed by the assessee and has held them to be not capital goods. There is no reason to differ from the view already expressed by the Tribunal to grant modvat credit in respect of 14 items in which the assessee is claiming the modvat credit. Respectfully following the ratio thereof, the claim of the assessee is accepted by allowing their appeals.
6. In respect of Revenue's appeals, we notice that the Revenue has challenged the Modvat credit in respect of 19 items. The Counsel has filed the tabulated column showing the items and the case-law applicable to each of the items. We have carefully considered the various judgements and the items on which the Commissioner has granted the benefit. We find that the Commissioner is fully justified in granting the benefit as the ratio of the Apex Court judgment clearly applies to the facts of the case. Hence we do not find any infirmity in the Commissioner's order granting modvat credit in respect of 19 items and hence we reject the appeals filed by Revenue. All the four appeals are disposed of in the above terms.
(Dictated and pronounced in open Court)