Customs, Excise and Gold Tribunal - Delhi
Mahavir Aluminium Ltd. vs Commissioner Of Central Excise on 10 August, 1999
Equivalent citations: 1999(114)ELT360(TRI-DEL)
ORDER G.A. Brahma Deva, Member (J)
1. This appeal arises out of and is directed against the impugned order passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur at New Delhi.
2. Heard both the sides.
3. The short point to be considered in this case is whether Capacitor and Reactor are considered to be eligible capital goods in terms of Rule 57Q of the Central Excise Rules to avail Modvat credit.
4. Shri Rajesh Kumar, learned Advocate submitted that the issue involved herein has been concluded by the Larger Bench of the Tribunal in the case of Jawahar Mills Ltd. v. C.C.E., Coimbatore reported in 1999 (32) RLT 379. He also relied upon the earlier decision of the Tribunal in the case of Grasim Cement v. C.C.E., Raipur reported in 1997 (96) E.L.T. 354 (Tribunal) wherein it was held that switch panels being device for regulating electric supply, is an accessory in the form of capital goods essential for proper working of machine and for production of goods. He submitted that a controlling panel of this item is not in dispute as can be seen from the respective impugned order.
4. On the other hand, Shri T.A. Arunachalam, learned JDR submitted that the item is to be understood as defined. Further, the item as such has not been used for the manufacture of the product. He referred to the circular issued along with Budget 1995 which is reproduced in para ten of the order of the Tribunal in the case of Jawahar Mills Ltd. (supra) and relevant para ten is as under : -
Para 16(iii) of the circular issued along with the Budget 1995 which is relevant in this regard reads as under : -
(iii) In the cases of capital goods, the scope of capital goods has been extended by specifying a larger number of machinery which will qualify for credit under Rule 57Q. In respect of such capital goods, it has been provided that so long these are used in the factory of product, credit will be allowed, without the need to establish as to whether such capital goods are used in the manufacture of finished goods. It may be clarified that any equipment etc. purchased by a manufacturer but not used within the factory will not be admissible for Modvat. For instance, R&D equipment used by a manufacturer in their laboratory outside the factory will not be eligible for Modvat. If however, such laboratory is part of the manufacturer's factory, Modvat will be admissible".
He also submitted that these items are eligible for Modvat credit only from 15-3-1995 and 23-7-1996 since they were included specifically with date prior to that they were not eligible in terms of Rule 57Q(2) of the Central Excise Rules.
5. On a careful consideration of the submissions made by both the sides and taking into consideration of the decision of the Tribunal in the case of Jawahar Mills Ltd. referred to above particularly in para 41 of the said order, I am of the view that these two items are eligible capital goods in terms of Rule 57Q to avail the Modvat credit. In the view I have taken I allow the appeal accordingly with consequential relief if any.