Customs, Excise and Gold Tribunal - Bangalore
Waters India (P) Ltd. vs The Commissioner Of Central Excise, ... on 13 December, 2001
Equivalent citations: 2002(147)ELT990(TRI-BANG)
JUDGMENT
G.A. Brahma Deva
1. These are seven appeals filed by the appellants, M/s Water India (P) Ltd. with reference to common impugned order involving common issue. Therefore all these appeals are taken together and are being disposed of by this common order.
2. The short point to be considered in these appeals is whether Computer and peripherals can be considered as eligible inputs in terms of Rules 57A to avail Modvat credit.
3. The appellant was issued a Show Cause Notice by the Department denying Modvat credit on computers and peripherals purchased for manufacture in HPCL on the ground that the same is not an eligible input. The concerned Assistant Commissioner as per his order denied the modvat credit holding that the item was an 'accessory' and therefore was not eligible for Modvat credit. The order of the Assistant Commissioner was confirmed by the Commissioner as per the impugned order. Aggrieved by the said order, the party has filed these appeals.
4. Shri Raghuramam, learned Advocated appearing for the appellants explained the basic function of the HPLC, as stated in the Memo of Appeals which is as under-
(a) The basic function of the HPLC is to separate fluids into compounds following complex chemical operation. Advance scientific applications which require minute calculations and complex separation of fluids require that the system be totally automated for accuracy and reliability.
(b) The process of separation of fluids results in identifying peaks or chromatography bands which shows that the separation of fluids is complete.
(c) In order to do this properly, an accurate recording device is needed along with a pumping system that will deliver a precise flow rate through out the operation.
(d) Computers and peripherals are purchased and a whole variety of hardware such as co-processor printed circuit boards, digital cards and application specific software are incorporated. Most important a pump control card is incorporated to ensure precise flow rate of fluids necessary for identifying peaks and completing accurate analysis of fluids.
(e) The results of (d) above, is that a gradient controller and date station comes into being which controls the entire manufacturing process as well as takes parts in the analysis of fluids by identifying peaks (which is the purpose of HPLC).
Further Shri Raghuraman said that the issue involved herein is no longer res-integra in view of the decisions of the Tribunal in the case of Digital Equipments (I) Ltd. v. Commissioner of c. Excise, Bangalore reported in 1996 (86) E.L.T. 127 (Tribunal) as well as Searle (India) Ltd. v. Collector of Customs, Bombay reported in 1996 (87) E.L.T. 640 (Tribunal). In the case of Digital Equipments (I) Ltd. (supra), it was held that Mini Computer is prima facie an input in VAX/DEC unit system hence eligible for Modvat credit - Mini Computer being functional by itself, is no criteria for not treating it as an input. Similarly in the case of Searle (India) Ltd. referred to above, it was held that Computer is an integral part of equipment - Gas chromatography System and Clearance of Department of Electronics is not required where Computer is built-in integral part of the equipment.
5. Shri Narasimha Murthy, learned JDR appearing for the Revenue tried to justify the order passed by the authority below that the item was an 'accessory' but in vain.
6. On a careful consideration of the submissions made by both sides and taking into consideration of the case law referred to above by the counsel for the appellants, I find that Computer and peripherals being an integral part of the HPLC and since the value of these equipment was also included in the value of final product, I do not find any valid reason to reject the Modvat credit on Computer and peripherals as input as claimed by the assessee. In the facts and circumstances of the case, I accept the contention of the party. Accordingly all these seven appeals are allowed.
(Pronounced and dictated in the open court)