Customs, Excise and Gold Tribunal - Bangalore
Murudeshwar Ceramics Ltd. vs Cce on 18 August, 1999
Equivalent citations: 2000(90)ECR327(TRI.-BANGALORE)
ORDER G.A. Brahmadeva, Member (J)
1. Whether waste water clarification plant is an eligible capital goods to avail Modvat credit in terms of Rule 57Q is an issue to be considered in this case.
2. Sri. Section Raghu, learned Counsel appearing for the appellants submitted that the item as such was used in relation to the process of manufacturing. He explained the process of manufacture. He said that water is an essential requirement for cutting and polishing granite and water clarification plant is essential in helping the purification of water for recycling and use in the process of manufacture of the final product and therefore, has to be construed as capital goods as defined under Rule 57Q. He also submitted that cutting is a process and all plants and machinery to achieve the result are nothing but plant and machinery only falling under the category of capital goods. Without spraying the water cutting of the granite block is not possible and therefore, the finished product granite cannot be marketable. He also refers to the findings given by the Commissioner (Appeals), wherein he admitted that water clarification plant is installed to prevent pollution and also to remove hazardous substances present in the effluent. This effluent is purified and water is recycled for use in the factory.
3. Arguing for the revenue Smt. Aruna Gupta, Learned D.R. submitted that the plant as such cannot be considered to be used in processing and producing the initial product. The water clarification plant is neither covered under Rule 57Q for the purpose of Modvat credit. She also relied upon the decision of the Tribunal in the case of Modern Petrofils v. CCE, Baroda as , wherein it was held that demineralised water treatment plant used to produce such water which is for spin finish oil which in turn is used for producing yarn, having no direct nexus to the manufacturing stream in the factory is not eligible for Modvat credit in terms of Rule 57Q of the Central Excise Rules, 1944.
4. On the other hand, the appellants counsel immediately relied on the decision rendered in the case of Grasim Cement v. CCE as , wherein it was held that pollution control equipment being a necessary item for functioning of plant is eligible for modvat credit as capital goods in terms of Rule 57Q of Central Excise Rules.
5. On a careful consideration of the submissions made by both sides with reference to the facts of the case, I find that there is some force in the arguments advanced on behalf of the appellants that there is a clear finding given by the authorities below that the plant is installed to prevent pollution and also to remove hazardous substances present in the effluent. In view of the admitted position that water clarification plant is installed to prevent pollution and taking into consideration of the ratio of the decision of this Tribunal in the case of Grasim Cement that pollution control equipment is a necessary equipment for functioning of plant, I am of the view that the plant as such is eligible for Modvat credit as capital goods in terms of Rule 57Q of the Central Excise Rules.
6. In view of this, I set aside the impugned order and the appeal is allowed on this issue.
(Pronounced and dictated in the open court).