Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Customs & Central ... vs United Phosphorus Limited on 28 May, 2003
Equivalent citations: 2003ECR197(TRI.-MUMBAI)
ORDER
Jyoti Balasundaram, Member (Judicial)
1. The Revenue has filed the above appeal against the order of the Commissioner of Central Excise, Vadodara in so far as it relates to extending modvat credit of Rs. 9,01,375.06 on circuit breakers, isolating switches, DC sockets, copper bus bars, panels, power sockets, convenience sockets and auxiliary panels.
2. On hearing both sides I note the Revenue's own case in their appeal memorandum is that the items are in the nature of electrical equipment which according to them are not covered by the definition of capital goods. The description of the items as admitted by the department is as follows:
(i) Panel/Auxillary Panel/Circuit Breaker:
"These items are nothing but "electrical apparatus for switching/distributing power to other apparatus". Being goods, which are not related to the manufacture of final excisable product, allowing credit on it as capital goods is not correct. Since their function does not at all relate to the production of processing nor does it bring about any change in the final product, such goods cannot be considered as capital goods. Thus total credit of Rs. 2,34,811.99 (Panel: Credit of Rs. 1,21,193.29. Auxillary Panel: Credit of Rs. 68,171.22, Circuit Breaker Credit of Rs. 45,447.48) allowed on these items is not correct.
"(ii) Isolating switches:-
"As per the function stated by the assessee, these isolating switches are used in the negative busbars for connecting or disconnecting negative supply and are used as a spare part of the plant. Thus, it is clear that isolating switches are only SPARES which do not participate in the processing activity, which leads to the manufacture of final product and do not fall under the purview of capital goods. Hence, allowing credit of Rs. 2,27,237.41 on this items is not justified.
"(iii) DC Shunts:-
"DC Shunts are used for measuring the DC current flow. Thus these acts as monitoring agents only and are not directly involved in the manufacturing of final products. Hence, allowing credit of duty of Rs. 2,27,237.41 on DC shunts by considering these as capital goods is not correct.
"(iv) Copper Busbars:
"As per the function stated by the assessee, Copper busbars act as high current feeders and reduce the wastage of electricity. Though reduction of wastage of electricity is an active process, copper busbars act as a intermediate equipment only and are not directly linked in the manufacturing of the final product. Hence, allowing credit of Rs. 1,51,491.61 of this item is not correct.
"(v) Power Sockets / Convenience Sockets:-
"Sockets are the devices for receiving plug to make a connection. These sockets are fitted a different points in the plant and can be used whenever required. It is the function of the sockets is purely optional. It is fitted in the plant for extra convenience only and is not a necessary item without which the plant cannot function. Sockets never contribute in itself directly to the processing a final product. Hence credit of duty of Rs. 60,596.64 (credit of Rs. 41,660.19 on Power Sockets and credit of duty of Rs. 18,936.45 on Convenience Sockets) is not correct."
3. I therefore find no reason to interfere with the impugned order as it is in conformity of the Supreme Court decision in the case of CCE, Coimbatore v. Jawahar Mills Ltd., 2001 (132) ELT 3 upholding the Tribunal's larger bench decision reported in 1999 (108 ELT 14. I therefore uphold the impugned order and reject the appeal.