Customs, Excise and Gold Tribunal - Bangalore
Pearl Polymers Ltd. vs The Commissioner Of Central Excise, ... on 20 December, 2001
JUDGMENT
G.A. Brahma Deva
1. Shri K. Parameshwaran, learned Advocate appearing for the appellants submitted that the short point to be considered in this case is whether Air dehumidification/Air Conditioning equipment is eligible capital goods in terms of Rule 57Q of Central Excise Rules, 1944 to avail Modvat credit. He submitted that the issue is no longer res-integra in view of the decisions of the Tribunal in the cases of CCE v. SPIC Pharmaceutical Division - 2001 (39) RLT 871 (T); Pharmasynth Formulations v. CCE - 1999 (107) ELT 66 (T); CCE v. Blue Cross Laboratories - 2000 (120) ELT 716; and Bombay Dyeing & Mfg. Co. Ltd. v. CCE - 2000 (122) ELT 90(T). He also submitted that the Tribunal in the case of Jawahar Mills Ltd. v. CCE, Coimbatore reported in 1999 (108) ELT 47 (T) has taken the view that air conditioning appliances/equipment are to be considered as capital goods and the view taken by the Tribunal was upheld by the Supreme Court in the case of CCE v. Jawahar Mills Ltd. reported in 2001 (132) ELT 3 (SC).
2. Shri Narasimha Murthy, learned JDR appearing for the Revenue submitted that Rule 57Q was amended by Notification No 14/96 specifying certain items are eligible capital goods and these items are not eligible capital goods as they were not specifically included. He also submitted that in the case of J.K. Synthetics Ltd. v. Commissioner of Central Excise, Jaipur reported in 1196 (88) E.L.T. 785 (T) it was held that Substitution of Rule 57Q amended by Notification No 14/96 is clarificatory in nature and accordingly it has got retrospective effect.
3. In this context, Shri Parameshwaran drew my attention to the decision of the Tribunal Larger Bench (5 Members) in the case of Surya Roshni Ltd. reported in 2001 (42) RLT 817 (CEGAT - L.B) wherein it was held that Rule 57Q amended by notifications not retrospective in effect. He also drew my attention to para 12 of the said decision which is as under :-
Para 12 - "Effect and ambit of notifications issued in 1995 and 1996 enlarging the ambit of Rule 57Q cannot have any retrospective effect. The goods brought within the purview of this rule by the notification are eligible for Modvat credit even if they do not satisfy any of the three tests mentioned in the second part of clause (a) of the Explanation. Such goods, even if they are not satisfying the test, will become eligible for Modvat credit by the specific inclusion by the notification with effect from the date of the notification."
3.1 have carefully considered the matter. In view of the decision of the Supreme Court in the case of Jawahar Mills Ltd. (supra), it is settled position now that the item in question is eligible to avail Modvat credit. In the decision of the Tribunal (Larger Bench) in the case of Surya Roshni Ltd. referred to above, it was clearly held that effect and ambit of notifications issued in 1995 and 1996 enlarging the ambit of Rule 57Q cannot have any retrospective effect. Following ratio of the decisions referred to above, I accept the contention of the party. Accordingly the appeal is allowed with consequential relief if any.
(Pronounced and dictated in the open court)