Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Chemplast Sanmar Ltd. on 9 May, 2005
ORDER P.G. Chacko, Member (J)
1. In this appeal of the Revenue, the short question is whether capital goods credit was admissible to "MS Tanks" (Heading No. 73.09 of the CETA Schedule) during October, 1996. According to the appellant, goods falling under Heading No. 73.09 were brought within the scope of 'Capital goods' for Modvat purpose only with effect from 1.3.2001 (vide Notification No. 6/2001-CE(NT) dt. 1.3.2001 and, therefore, capital goods credit was not available to such goods prior to 1.3.2001. Ld DR has reiterated this ground of the appeal. According to ld. Counsel for the respondents, MS Tank, which was admittedly, a part of the manufacturing plant was an eligible capital goods in terms of Clause (a) of Explanation 1 to Rule 57Q(1) of the Central Excise Rules, 1944 during the period of dispute. He has further submitted that, as held by the Tribunal's Larger Bench in Commissioner of Central Excise, Indore v. Surya Roshni Ltd. . The question whether any goods could be held eligible for capital goods credit under Rule 57Q should be decided in terms of the express provisions of the Rule prevailing during the relevant period. Benefit of Clause (a) of Explanation 1 to Rule 57Q(1) cannot be denied to the assessee on the ground that the capital goods in question were specifically mentioned in the list of modvatable capital goods on a later date. I am inclined to agree with this argument of Ld. Counsel. Admittedly, during the period of dispute, Clause (a) of Explanation 1 to Rule 57Q stood as under:
Explanation--For the purposes of this section,--
(1) "capital goods" means
(a) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products.
Again, admittedly, the MS Tanks in question were used as part of the manufacturing plant. According to the aforesaid definition, plant, machines, machinery, equipment, apparatus, tools or appliances used for manufacturing final products were capital goods eligible for Modvat credit. The fact that goods falling under Heading No. 73.09 were specifically mentioned in the list of modvatable capital goods only with effect from 1.3.2001 per se does not detract from this legal 3 position. The Tribunal's Larger Bench has held in the case of Surya Roshni (supra) that the eligibility of capital goods for Modvat Credit should be determined in terms of the prevailing law. The law prevailing during the period of dispute permitted Modvat Credit on plant, machinery etc. used for manufacture of final products vide Clause (a) of Explanation 1 to Rule 57Q(1). Hence the subject credit was admissible to the respondents in October, 1996. The impugned order is sustained and this appeal is rejected.
(Operative portion of the order was pronounced in open court on 9.5.2005)