Customs, Excise and Gold Tribunal - Tamil Nadu
Ccex, Coimbatore And M/S. Chemplast ... vs M/S. Chemplast Sanmar Ltd. And Ccex, ... on 20 April, 2001
Equivalent citations: 2001ECR104(TRI.-CHENNAI)
ORDER
Shri S.L. Peeran Both the Revenue and party have filed the above appeals against a common Order-in-Appeal No.202/98(CBE) dated 24.12.98 passed by CCE, Trichy deciding the question of grant of Modvat credit in respect of 9 item. In 6 items, he has not granted Modvat credit while in respect of 3 items, he has not granted Modvat credit while in respect of 3 items he has granted the credit. The Revenue is aggrieved with granting of Modvat credit on the 3 items and the appellants are aggrieved with non grant of Modvat credit on 6 items. A Table has been prepared by the counsel along with the use of each of the item and case law covering the issue. Sl. No. 1 to 6 the item listed are those on which the Commissioner (Appeals) has not granted Modvat credit while in Sl. No. 7 to 9, the Commissioner has granted the Modvat credit on which the Revenue is aggrieved. The table is annexed below:-
TABLE OF CASE LAW
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| Sl.| DISPUTED | USE OF GOODS | CASE LAW | | No.| GOODS | | |
|----|-----------------|-----------------------------|-------------------------------------------------| | 1. | Anti vibration | These are used to mount | CCE, Meerut Vs Micro brasives (I) Ltd. | | | mounting bolts | the machinery to the earth | 1998(102) ELT 150(T) | | | and nuts | and to prevent vibration | CCE, Patna Vs. Bihar Caustic & Chemicals Ltd. | | | | | 2000(118) ELT 196(T) | |----|---------------- |-----------------------------|-------------------------------------------------| | 2. | Respiratory | Masks used for safety, | No Case Law | | | items | mandatorily | | | | | | | | 3. | Adhesives | This is used to fix the | No Case Law | | | | rubber cell cover with the | | | | | cell | | | | | | | | 4. | Transformer | Oil used for transformers. | 2001(4) ELT 78(T) | | | oil and solder | Solder sticks are used for | Madras Al. Co. Ltd. CCE | | | sticks | welding purposes | CCE, MEERUT-I vs Modi Rubber | | | | | 2000(119) ELT 197(T) | | 5. | Fibre glass and | Fibre glass is used as an | CCE, Madras Vs. Tamil Nadu Petroproducts Ltd. | | | Compressed | electrical insulator | 2000(126) ELT 1048 | | | asbestos | compressed asbestos used | Jawahar Mills Ltd. Vs. CCE, Coimbatore | | | | as roofing | 1999(108) ELT 47 | | | | | | | | | | | | | Blind plug | Valves for chlorine | Jindal Polyester | | | valves | cylinders | 1997(93) ELT 311 | | | | | | | 7. | Seamless | These are pipes, tubes and | 1. CCE Delhi III Vs Jindal Strips Ltd. | | | tubes, MS | fittings used for | 2000(124) 306(T) | | | seamless pipes, | transporting material | | | | flanges and | | 2. Lupin Laboratories Ltd., V. CCE | | | hose assembly | | 1998(100) ELT 52 | | | | | 3. Siel Sugal V. CCE | | | | | 1998(99) ELT 54 | | 8. | Nickel silver | Electrical equipment | CCE Chandigarh Vs Arihant spinning mills | | | contact and | | 2000(124) ELT 681(T) | | | motor control | | | | | centre | | | | 9. | FRP tank | Storage tank | Lupin Laboratories Ltd. Vs CCE, Indore | | | | | 1999(114) ELT 867 | | | | | SRF Ltd. Vs. CCE | | | | | 1999(106) ELT 317 | | | | | |
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2. I have heard both sides in the matter. Ld.DR contended that although the counsel has shown in respect of Sl. No. 1,4,5 & 6 case laws as noted above, but the Revenue is aggrieved with the said orders of the Tribunal and the matter has been taken up before the Apex Court, especially the judgment of Jawahar Mills which is a Larger Bench judgment. As regards the 3 items on which Modvat credit has been granted which is shown in Sl. No. 7 to 9, Ld.DR submits that they cannot be considered as capital goods as they have no role to play in the process of manufacture.
3. On the other hand, Ld counsel emphasizes that all the items noted above are covered by the case laws given and the cited judgments are directly to the issue except in respect of respiratory items and adhesives. He submits that the Commissioner did not consider these two items of capital goods as not falling within the definition of capital goods "as the said items are not used in the manufacture of final product". Counsel explains that respiratory items are used as a safety purpose mandatorily prescribed as the final product is manufactured is caustic soda which is a dangerous item for workers who deal with it. They have to use oxygen to save their lives while manufacturing the caustic soda which is a poisonous item. Therefore, these apparatus also fall within the ambit and the Larger Bench judgment on Jawahar Mills Ltd. cited above and which is further clarified by another Larger Bench judgment in the case of CCE Vs. Surya Roshni [2000 (128) ELT 293] applies to the item of respiratory items. As regards adhesives, he submits that they are used to fix the rubber cell which covers the cell. He submits that in order to bring into existence of the "cell" adhesives is an important item, i.e. it is used to fix the rubber cell cover with the cell. The Commissioner has held it to be a chemical and not to be treated as capital goods. He submits that the ratio of the judgment rendered for Transformer oil would apply to this case. The solder sticks have been considered to be capital goods and so also welding rods. The present adhesives also has a similar function to welding rods, solder sticks and transformer oil and therefore, the Large Bench judgment would apply to these two items also.
4. On a careful consideration of the submission, at the first instance, I take up the Revenue appeal. The Revenue has challenged the Modvat credit granted in respect of items in Sl. No. 7 to 9 in the table. It is seen that all the 3 items on which the challenge has been made by Revenue is not sustainable for the simple reason that the Commissioner has examined in great detail about the nature of the item and has granted Modvat credit which is in keeping with the ratio given by the judgments cited. Those judgments directly apply to the items in Sl. No. 7 to 9 on the very product. Therefore, there is no reason to differ from those judgments and hence applying the ratio thereof, the Revenue appeal No. 393/99 is rejected.
5. As regards the 6 items on which the Modvat credit has been denied, the table extracted above clearly indicates the case law covering each of the item except in the case of respiratory items and adhesives. As regards the respiratory items, it is used as a mask for safety purpose and it is mandatorily prescribed bylaw. The persons using of caustic soda, a dangerous chemical, are required to utilise this apparatus for saving their lives. It is not understandable as to how it cannot be a capital goods when the mask used for welding is granted Modvat credit. For the purpose of welding, a worker has to wear goggles or a glass shield to protect the eyes and face. They re considered as equipments and apparatus. Like-wise, the respiratory item is a necessity and has to be used as mask for safety purpose as it is essential requirement for use in the manufacture of caustic soda. Therefore, the ratio of the judgments Larger Bench in the case of Jawahar Mills Ltd. & Union Carbide [1996 (86) ELT 613] applies to these items.
6. As regards the adhesives, it is seen that it is a necessary item to fix the rubber cell cover with the cell. A cell which comes into existence when the adhesives being utilised. The ratio of the judgment rendered for the purpose of transformer oil and solder sticks as well as welding rods in applicable for the purpose of adhesives. All have a common function. Just as welding sticks have been considered as capital goods, so also transformer oil as it is a necessary lubricant, we have to consider adhesive, which is a necessity for the purpose of fixing rubber cell cover with the cell to fall in the same line. Therefore, the ratio of Larger Bench judgment would apply to these two items also.
7. As regards the item at Sl. No. 1, 4, 5 & 6, they are covered by the judgments cited in the table itself. there is no other judgment of contradictory to the same and the issue has been totally settled by Larger Bench judgments. In that view of the matter, the Order of the Commissioner denying Modvat credit to Sl. No. 1 to 6 is set aside and party's appeal E/559/99 is allowed.
Dictated & Pronounced is open court.