Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Madras Aluminium Co. Pvt. Ltd. on 12 February, 1998
Equivalent citations: 1998(61)ECC141
ORDER
T.P. Nambiar, Member
1. The question involved in this appeal is with respect to the eligibility of Amco lead Acid Stationary Cell for the purpose of MODVAT Credit under Rule 57Q. In the order passed by the AC at para 10.1 he has held as follows:
AMCO Lead Stationary Cell:
This is used to take care of power supply when power failure occurs. These cells will be supplying power for the operation of Circuit Breakers and isolators used at the main power supply point and at Rectifier Plant. As already discussed, the electrical equipments for the regulation of electricity supply will not fit in any of the category of the explanation to Rule 57Q. Further the SH No. 8507.00 has not been included as capital goods in modvat scheme and hence the credit taken merits reversal.
2. In the impugned order, the CCE(A) set aside that portion of the order and granted benefit to the respondents. In para 3 of the impugned order, he held as follows:
I observe that so far as Amco Lead acid stationery cell is concerned, it is an equipment to take care of the power supply should there be any power failure during the course of manufacture. These cells supply power for the operation of circuit breakers used at the main power supply point and at rectifier plant which supplies power in electrolytic cells. When power failure occurs, the circuit breakers and the isolators should be in open position to ensure current flow to electrolytic cells. The opening mechanism of circuit breaker and isolators is operated by the power supplied from these stationary cells and therefore, these are used in relation to the manufacture of the final products and are entitled to credit. So far as the cables are concerned, it is an admitted position they are used only for communication of details although relating to production from one end to another. Even the enlarged concept of capital goods will not cover such type of cables and therefore, it is considered that intercom cables have been rightly denied Modvat Credit.
3. Shri R. Saroop, learned DR for the Revenue stated that the CCE(A) had not correctly appreciated the matter in view of the fact that the parameters adopted by him is whether these are used in relation to the manufacture of the final product. In this connection he pointed out that the question of relation to manufacture does not arise in view of the explanation 1(a) to Rule 57Q. Under the explanation, it is stated that capital goods means, machinery, machine, plant, equipment, apparatus, tools or apparatus used for producing or processing of any goods or bringing about any change in any substance in the manufacture of the finished product.
4. Heard Shri R. Parthasarathy, learned Counsel for the respondent. He stated that in the show cause notice at page 2, the Range Supdt. does not dispute about the coverage of the items under explanation 1(a). He, therefore, stated that this fact was not disputed by the Range Supdt.
5. We have considered submissions made before us. We are now examining the correctness or otherwise of the impugned order passed by the CCE(A). The AC has stated that these batteries are used for supply of power for operation of the circuit breakers and isolators. He stated that these goods are not entitled for the benefit of MODVAT Credit. But the CCE(A) on the other hand stated that these are used in relation to the manufacture of the final product. In order to come to the correct finding the write-up given by the respondent indicating the actual usage of batteries should be discussed by the authorities concerned and after analysing the above said write-up he should enter the finding as to whether the item qualify for the benefit in terms of Explanation 1(a) of Rule 57Q. This having not been done in this case, we are of the view that the impugned order should be set aside and we order accordingly and remand the matter to the CCE(A) for de novo consideration in the light of our above observation. The appeal is allowed by way of remand.
Dictated and pronounced in open Court.