Customs, Excise and Gold Tribunal - Mumbai
Century Rayon Ltd. vs Commissioner Of Central Excise, ... on 12 November, 2001
JUDGMENT
G.N. Shrinivasan, Member (Judicial)
1. This appeal is filed against the decision of the Commissioner Central Excise, Mumbai-III, made in Order in Appeal dated 23.06.2000 who reversed the findings given by Assistant Commissioner of Central Excise, Kalyan, Division-I, who by the Order in Original No. 2/99 dtd. 22.01.1999 dropped the Show Cause Notice issued on 31-08-1998. In the said show cause notice proceedings were initiated denying the modvat credit on storage tanks under Rule 57Q of the Central Excise Rule. The AC considered the reply to the Show Cause Notice given by the assessee and held that the assessee had used the tanks in the manufacturer of the products in the factory. The appellate authority did not agree with the findings of the adjudicating authority. Hence the present appeal.
2. The representative of the appellant argued before me that the tanks were used in factory for storage purposes. He invited my attention to the decision of the Single Member in the case of Dabur India Ltd. v. Commissioner of Central Excise, Meerut reported in 1998 -- (98) ELT 674 where under similar circumstances modvat credit was granted.
3. I have considered the contentions raised by both sides. In the reply to Show Cause Notice the assessee has interalia stated as follows.
We submit the capital goods viz. PVC FRP Tanks are accessories for the Chlorine plant. In the said plant, the chlorine gas evolved in electrolyser is being sucked by Chlorine compressor. After passing through the drying tower and compressor,it goes to liquifier where the same is liquified and stored in tanks. In drying tower and chlorine compressor 98% sulphuric acid is used for drying purpose. The PVC, FRP tanks are used to store 98% and 96% sulphuric acid. 98% sulphuric acid is fed to chlorine compressor to remove moisture. When its concentration goes below 97% in chlorine compressor it is being pumped to another tank from where the same is again fed to drying tower for removal of moisture. It is rejected when its concentration comes down to 70% in drying towers.
4. From the above it will be clear that the said tanks have been used in the factory. In the said decision of tribunal in the case of Dabur India Ltd. (Supra), it has been held as follows.
Regarding the stainless steel tanks, the admitted position is that they are used for keeping the material during the process of manufacture and therefore can be considered as equipment or part of plant used for processing goods and covered by the definition of capital goods under Rule 57Q.
In view of the above finding of the learned Single Member in the said case the assess case is covered squarely in this case. Hence I reverse the finding given by the Commissioner (Appeal) and hold that the assessee is entitled to the claim of modvat credit in terms of Rule 57Q of the Central Excise Rules Appeal is allowed. Consequential relief if any according to the law.
(Pronounced in Court)