Customs, Excise and Gold Tribunal - Delhi
Cce, New Delhi vs M/S. Laxmi Precision Screws Ltd. on 11 April, 2001
Equivalent citations: 2001(132)ELT310(TRI-DEL)
ORDER K.K. Bhatia, Member (T)
1. The assessees M/s. Laxmi Precision Screws Ltd., are the manufactures of nut, bolts, screws and parts falling under Chapter Sub-heading 7318.00, and 8714.00 of Central Excise Tariff Act, 1985. The Asst. Commissioner of Central Excise, Rohtak vide his Order dt. 28.10.96 disallowed the modvat credit totally amounting to Rs. 6,697.68 availed by them on the measuring instruments falling under Chapter heading 90.31 as capital goods under Explanation 1(d) (i) to Rule 57Q of the Central Excise Rules, 1944. The Asst. Commissioner of Central Excise in his order observed that times instruments are used for testing and measuring dimensions of the finished product.
2. The party filed an appeal and the Commissioner of Central Excise (Appeals), New Delhi vide his Order dt. 3.6.98 allowed the appeal with the observation that the process of measuring and testing various instruments as well as finished goods are essential in completion of manufacture of any goods. The second stage appeal failed by the Revenue before the CEGAT failed and the Tribunal vie its Order dt. 8.7.99 rejected the appeal of the Department upholding the order passed by the lower Appellate Authority.
3. The Revenue filed the present Reference Petition for referring the following question of law to the Hon'ble High Court:
" In the facts and circumstances of this case whether the Appellate Tribunal is correct in holding that the measuring instruments is a capital goods as defined under Rule 57-Q of the Central Excise Rules, 1944".
4. I have heard Shri J. Singh, JDR for the Revenue. The respondents are not represented. It is observed that this matter stands fully settled by the judgment of the Hon'bel Madras High Court on the subject in the case of M/s. SIV Industries Ltd. vs. CCE Coimbatore reported in 2001 (129) ELT 48 (Mad.). In that judgement, the High Court while analysing the definition of the Expression 'Plant' as mentioned in the provisions of the Rule 57-Q have observed as follows:
" 29. The word employed in the definition viz., "plant" being a term of wide import, the facts that it is used in the context of process of manufacture, the definition of "manufacture" is an inclusive definition in the Act; the further fact that it is found in the context of the enumerated things of a class being used; and in the absence of any specific requirement that the sue should be directly in the production or processing of goods, warrant a wider meaning being assigned to the word "plant" i that definition, and not limit it only to things which directly go into the production process. It would include goods which are necessary to make that production process possible. Power being essential to the process, wires and cables required to bring that power to the machines, appliances, etc., are also covered by the definition of "capital goods".
5. The above observation of the High Court is with reference to the cause of wires & cables. It is observed that the Expression used in this Rule, in the absence of any specific requirement that the use should be direct in the production or processing of goods, warrant a wider meaning being assigned to the word "plant" in that definition, and not limit it only to things which directly go into the production process. It would include goods which are necessary to make that production process possible. These observations of the High Court relating to the definition of the Expression used in the relevant Rules relating to the capital goods are equally applicable to the measuring instruments -- the goods under consideration-in the present proceedings. Since the matter stands completely settled by the above observation of the High Court, there is no ground to refer the question of law framed by the Revenue to the High Court. Thus, the Reference Application filed by the Department is rejected.
(Announced and dictated in the Court)