Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Texon Industries And Anr. on 26 February, 2002
Equivalent citations: 2002(104)ECR607(TRI.-CHENNAI)
ORDER S.L. Peeran, Member (J)
1. These are two revenue appeals against two different assessees. As the issue is common they are taken up for disposal as per law.
2. In E/418/2000 CCE v. Texon Industries Ltd. the revenue is aggrieved with the order-in-appeal No. 22/2000 (M-III) dated 21.1.2000 passed by the Commissioner (Appeals), Chennai upholding that Main Lighting DB, Sub-lighting DB and Sub-Lighting DB-I are capital goods as they perform function of power and distribution board and they are necessary for the purpose of manufacture of the final product in the assessee's company. The Commissioner has analysed the definition of capital goods defined under Rule 57Q and has found that they come within the definition of the said term 'capital goods'. Revenue is aggrieved with this order and contend that the benefit of the capital goods cannot be extended to these items as they have no role to play in the manufacture of the final product and does not come with the definition of 'capital goods'. They are only to be classified under 'Power and Distribution Board'.
3. In E/628/2000 CCE v. MRF Ltd. revenue is aggrieved with the Commissioner (Appeals) order No. 9/2000 (T) (MJ) dated 25.1.2000 by which the Commissioner (Appeals), Trichy has held that ladder type cable tray and coupler plates are eligible to be treated as capital goods for the purpose of grant of modvat credit. He has noted the judgment of CEGAT in the case of CC v. Jolly Exports Pvt. Ltd. as and that of Ideal Engineering Works, v. State of Karnataka as reported in 1997 Kar LJ (Tri) 226 and found the same to satisfy the definition of the 'capital goods'. Revenue contend that the items have no role to play and cannot be considered as components, spares and accessories to any of the goods specified under SI. No. 1 of the table annexed to Rule 57Q(1) which allows credit to components, spares and accessories of the goods specified against SI. No. 1 to 4 of the table.
4. I have heard Ld. Dr Shri C. Mani. None appeared for Texon Industries despite notices to them. However, Shri Deivasigamani appeared for MRF Ltd. and contend that the issue is covered by the Larger Bench judgment rendered in the case of Jawahar Mills Ltd. 2000 (90) ECR 387 (T-LB) which has been upheld by the Apex Court as reported in 2000 (132) ELT 3 : 2001 (97) ECR 541 (SC) wherein the very issue was decided on assessee's favour.
5. On a careful consideration I notice that in both the appeals the items are held to be capital goods by the Commissioner in the light of the definition and explanation given to the capital goods and has also taken into consideration the case law. The matter was taken up by the Larger Bench of the Tribunal in the Jawahar Mills case and decided against revenue. The revenue took up the matter before the Apex Court and the Apex Court has upheld the Larger Bench's decision and held that cables are eligible for modvat credit. The Larger Bench have analysed the definition of the capital goods and has come to a conclusion that if any of the item play a role in the manufacture of the final product as accessory or component then the benefit is required to be extended. This finding has been confirmed by the Apex Court. The Commissioner has analysed both the items and found to be within the parameters of the explanation to capital goods. Therefore, there is no infirmity in the impugned orders and hence they confirmed by rejecting both the revenue appeals.
(order dictated and pronounced in the open court)