Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of C.Ex., Chennai And ... vs M/S. Sengunthar Spinning Mills (P) Ltd. on 12 April, 2001
ORDER
Shri S.L. Peerhan (Oral)
1. The issue is both these appeal is a connected one. Hence, they are taken up together for disposal as per law.
Appeal No.E/2660/98 This appeal is against the OIA No.113/98 (M) dated 30.3.91 by which the Commissioner (Appeals) has held that modvat credit is required to be extended to air conditions in the light of Tribunal judgment rendered in CCE Vs MODI XEROX LTD. 1996 (88) ELT 503(T).He has noted that item is not used for any other purpose other than for manufacturing activity in as much as it chill water coil which is used in air handling unit of the aid-conditioning plant. He has noted that the declaration had been filed and the assessee had taken acknowledgement. he further directed the AC to verify the correctness of the date and if the delay is within the condonable period, same be condoned and credit extended.
2. In this appeal, Revenue contends that the item has no connection with the manufacturing process and modvat credit cannot be extended to the item.
3. Heard Ld. DR Shri S.Sudarsan in the matter who sought for reversal for the order impugned.
4. On the other hand, the representative of assessee namely Shri Sethuraman submits that the issued is covered by the judgment cited by Commissioner (Appeals) and further relies on the judgment of CCE Vs TABELES INDIA LTD 2000 (93) ECR 381(T) on the same issue. Further reliance is made on judgment of JAWAHAR MILLS LTD Vs CCE-1999 (108) ELT 47 (T-LB) and the Tribunal judgment in CCE Vs BLUE CROSS LABORATORIES LTD., 2000 (120) ELT 716. He submits that they have not filed cross appeal with regard to Commissioner's direction for verification of their declaration. He submits that de novo proceedings was initiated by the AC for verification of all the documents in terms of Commissioner (Appeals) order and the AC was satisfied with the same. However, he has not yet passed any final order in view of this present appeal.
5. On careful consideration of the submissions, we notice that the Commissioner (Appeals) has examined the manufacturing process and the manner in which the item is put to use and found that it is very essential for the purpose of manufacturing final product. He has also noted that is not utilized for any other purpose other than for manufacturing of final product. Therefore, the Larger Bench judgment cited will apply to the facts of the case.
6. As regards Commissioner (Appeals) direction for verification, them matter is left open and it is for the AC to verify and pass appropriate orders. Thus the order impugned on merits is confirmed in terms of Commissioner (Appeals) order, by rejecting Revenue appeal and we uphold the Commissioner's direction to AC to verify the particulars of direction. Ordered accordingly.
Appeal No.E/1283/98
1.This is a revenue appeal against the order-in-appeal No.40/98 (CBE)dated 16/1/98 passed by CCE (A) Trichy allowing modvat credit of Rs.19,988/- on certain capital goods holding that they are covered within the explanation under Rule 57Q of Central Excise Rules. The items were air compressors and heatless air dryer. The Asst.Commissioner took the view that they had no part to play in the manufacture of final goods and the items cannot be considered as capital goods. On the other hand, the Commissioner (Appeals) after detailed examination of the manufacturing process and the manner in which these items are put to use, has come to the conclusion that the items are capital goods as they have definite role to play in the process of manufacture of final goods. He has noted that the item electronic magnetic amplifier is placed by the side of the comber machine. This will stop the carding machine, if there is any cut in the yarn/silver while in operation and it helps the proper functioning of the carding machine in its operation.As far as the electronic voltage stabilizer, he has noted that it is placed near the comber machine which is having unbuilt electronic system to control its speed.To avoid damage to electronic system due to variation in the voltage of electricity, the voltage stabilizer is required to be used as essential item.After detailed consideration, he has overruled AC's finding, holding them to be capital goods.He has also accepted the declaration filed by them which had been rejected by the AC on the ground that it was not in proper format.
2. Ld.DR took us through the records of respondent and submitted that the items cannot be considered as capital goods and the declaration has not been accepted as it was not in proper format. He refers to CCE Vs FOURTS INDS.PVT.LTD.- 1997 (92) ELT 231 (T) ruling which had held that there had to be a nexus between the inputs and the manufacturing process.
3. On the other hand, Ld. Counsel submits that the issue is no longer res integra in view of Tribunal judgment in CCE Vs BLUE CROSS LABORATORIES-2000 (120) ELT 716 wherein it has been held that compressors and other parts of air-conditioners are eligible for modvat credit as capital goods so long as the items have role to play in the manufacture of final product. Ld.Counsel also relies on the judgment of this Bench rendered in SURYALATA SPINNING MILLS Vs CCE 1999 (111) ELT 158 which is on the same issue. He submits that the assessee therein was manufacturing same goods as in this case and it was the same and the Tribunal upheld the assessee's contention in the light of large number of judgements including Apex Court.The Tribunal further relied on EICHER MOTORS LTD Vs CC Indore 1997 (95) ELT 433 (T) and that of CCE Vs SHANTI SYNTETICS LTD-1998 (97) wherein voltage stabilizers and voltage regulator used in the manufacture of goods were held to be capital goods being eligible for modvat credit under rule 57Q of C.E.Rules.This citation also refer to large number of High Court, Tribunal and Apex Court judgments.
4. With regard to plea of declaration, he submits that declaration had been filed and only a generic description of the inputs had been given. Such generic description of inputs, so long as it is clearly identifiable, was upheld to be acceptable as laid down by the EICHER MOTORS LTD. Vs CC Indore (supra). Therefore, he submits that the entire case is covered by the judgment and the citations referred to were prior to the Larger Bench judgment and even that judgement only lays down a general principal of nexus to be shown between the inputs and the machinery used for manufacture of final product.
5. On careful consideration of the submissions and on perusal of the records alongwith number of judgements, we are satisfied with the submission made by the Ld.Counsel that each of the items referred to is covered by the judgment cited. The Commissioner has examined the manufacturing process as well as the role played by each of the items alongwith main machinery.The same has been looked into by the Bench in the case of CCE Vs BLUE CROSS LABORATORIES (supra) and have upheld the assessee's contention.A similar view has been taken by this Bench in the case of SURYALATHA SPINNING MILLS(supra).As regards the voltage stabilizer and generator set the issue is covered by the case of CCE Vs SHANTI SYNTHETICS(supra).Further clarification pertaining to declaration has been given in the case of EICHER MOTORS LTD (supra). As the issue is covered by all the judgments, there is no infirmity in the Commissioner (Appeals) order.Therefore, this Revenue appeal is rejected.
6. (Pronounced & dictated in court)