Customs, Excise and Gold Tribunal - Mumbai
Commissioner Of Central Excise vs Garden Silk Mills Limited on 8 July, 2003
Equivalent citations: 2004(177)ELT703(TRI-MUMBAI)
ORDER V.K. Agrawal, Member (T)
1. In this appeal filed by Revenue, the issue involved is about the eligibility of certain goods for the Modvat Credit under Rules 57A and 57Q of the Central Excise Rules, 1944.
2. I heard Shri H. Kothikar, learned SDR for Revenue and Shri D.P. Marathe, Manager (Excise) of the Respondents. The Commissioner (Appeals) has allowed the Modvat Credit in respect of Silicon Spray and Water Treatment Compound. Silicon Spray is used to clean and wipe spinnerettes through which molten filament comes out. Water Treatment Compound is used at filament stage when filament comes out of spinnerattes and solidifies. It is the contention of the Department that Silicon Spray is simply cleaning agent to clean spinnerattes and Water Treatment Compound is used for purification of water and as such it cannot be said that these items are used directly or indirectly in or in relation to the manufacture of final products. I do not find any force in the submissions of the Revenue. Rule 57A of the Central Excise Rules, at the relevant time provided for taking the Modvat Credit of the duty paid on inputs which are used in or in relation to the manufacture of final products. The use of both Silicon Spray and Water Treatment Compound which has not been disputed by the Revenue, clearly shows that these are used in or in relation to the manufacture of final products of the Respondents, namely, Polyester Filament Yarn. As these inputs are used in or in relation to the manufacture of final products, they are eligible inputs for the purpose of availing Modvat Credit.
3. The Commissioner (Appeals) has also allowed the Modvat Credit of the duty paid in respect of the Electronic Invertor which is a device for changing heartz frequency to regulate the speed of electronic motor. Further, the Modvat Credit has also been allowed in respect of Primary Test Set which controls the current output as per setting and calibrating as required to operate the motors. The Commissioner (Appeals) has also allowed the Modvat Credit in respect of Low Voltage Power Supply which converts 220 Ac voltage to 224 DC voltage which is fed to computerised control system which controls entire operation in the factory. The Revenue has contended that the disputed items are such that they do not have any part in the process of manufacture. I do not find any infirmity in the impugned Order in allowing the Modvat Credit in respect of these items. As per the definition of the capital goods under Rule 57Q of the Central Excise Rules at the relevant time and as interpreted by the Supreme Court in the case of CCE, Coimbatore v. Jawahar Mills Limited, 2001 (132) ELT 3 (SC), any machine/machinery, etc. which is used in producing or processing of goods or bringing about any change in any substance in the manufacture of final products is capital goods for the purpose of availing of Modvat Credit. From the use indicated by the Commissioner (Appeals), it is apparent that the impugned goods are taking part in the process of manufacture of the final products and as such the Modvat Credit of the duty paid in respect of these goods can be taken. Accordingly, the appeal filed by the Revenue is rejected. (pronounced in court)