Customs, Excise and Gold Tribunal - Tamil Nadu
Jawahar Mills Ltd. vs Commissioner Of C. Ex. on 27 January, 1998
Equivalent citations: 1998(100)ELT41(TRI-CHENNAI)
ORDER T.P. Nambiar, Member (J)
1. This is an appeal filed by the appellants against the orders passed by the Commissioner (Appeals), Trichy. This present appeal relates to the dispute in availment of Modvat credit of capital goods in terms of Rule 57Q. The Commissioner (Appeals) did not allow the Modvat credit with respect to Electrical Wires and Cables.
2. The ld. Advocate Shri T. Ramesh appearing for the appellants pointed out that in the following decisions the Tribunal had granted the Modvat credit under Rule 57Q of the Central Excise Rules, 1944 in regard to Cables and Wires :-
(1) 1997 (96) E.L.T. 354 - Grasim Cement v. CCE, Raipur (2) 1997 (96) E.L.T. 404 - Modern Petrofiles v. CCE, Baroda (3) 1997 (95) E.L.T. 301 - Kanoria Chemicals & Inds. Ltd. v. CCE, Allahabad (4) 1997 (95) E.L.T. 655 - Century Cement Ltd. v. CCE, Raipur
3. In all the above cited decisions, he pointed out that the Tribunal had granted the Modvat credit under Rule 57Q of the Central Excise Rules, 1944 with respect of Electrical Wires and Cables.
4. But the ld. JDR Shri S. Murugandy pointed out that this Bench of the Tribunal did not grant benefit of Modvat credit under Rule 57Q of the Central Excise Rules, 1944 with respect to the Wires and Cables. In this connection he relied on the decision of this Bench in Order No. 939/1997, dated 4-4-1997 wherein at paras 2 & 3, the Tribunal held as follows :-
"2. The learned Consultant for the appellants at the outset conceded the plea of the revenue in the case of Room Air-conditioners figuring at Sl. No. (iv). The plea regarding the eligibility or otherwise in respect of the various items are as under :
Electrical Wires and Cables The learned JDR has pleaded that the Tribunal in its order in the case of SIV Industries vide Order No. 646/96, dated 16-4-1996 has held that the wires and cables which are used for transmission of electricity would not be eligible to the benefit of Modvat credit. The learned Consultant for the respondents has pleaded that subsequently they have been included by amendment in the definition of the capital goods as eligible capital goods and has pleaded that this amendment should be taken as clarificatory in nature.
3. We have considered the pleas made by both the sides. We observe that in our Order No. 646/96, dated 16-4-1996 in para 4 we have held as under:
I observe that the scope of the term capital goods has been set out by way of definition in the explanation to Rule 57Q, the main provisions under which the Modvat credit in respect of capital goods has been allowed. This definition as would be seen from the above cannot be taken to cover electric cables of the type referred to in the impugned order. The learned lower authority has not entered any finding as to whether this item would constitute a component or accessory of the capital goods as set out in the definition given above. Rule 57S only provides for the manner of utilisation of capital goods and the credit allowed in respect of the duty paid thereon. It does not in any why enlarge the scope of the definition capital goods for Modvat purposes. For an input to qualify as capital goods it should specifically satisfy the definition of capital goods as set out in the explanation to Rule 57Q. This in my view is not specified in the present case.
We have taken into consideration the scope of the definition of capital goods under Rule 57Q before holding that the Modvat credit in respect of these would not be available. The amendment made subsequently provides for a substantive modification of the rule and it is only by a specific mention the cables and wires can be taken to have been included while earlier Rule 57Q was not covering the same. We, therefore, hold that there is a force in the plea of the Revenue and we are of the view that Modvat credit could not have been allowed in respect of these items. The pleas of the revenue so far as the wires and cables are concerned are allowed."
5. I have considered the submissions. It is now seen that there is a conflict of decisions in this regard. This Bench has been taking the view that Modvat credit is not allowable with respect of Electrical Wires and Cables. A contrary view has been taken by the West Zonal Bench and North Zonal Bench.
6. In view of above conflicts, I am of the view that the matter requires to be referred to the Larger Bench. Accordingly, the following question is required to be referred to the Larger Bench for decision :-
Whether the appellants are entitled for the Modvat credit under Rule 57Q of the Central Excise Rules, 1944 with respect to Electrical Wires and Cables used in their factory?
The matter is thus submitted to the Hon'ble President for constituting a Larger Bench to decide the above said issue in view of reasonings mentioned above.
7. The Registry is directed to send the file to the Registry at New Delhi so that the matter can be placed before the Hon'ble President for necessary orders in this behalf.