Customs, Excise and Gold Tribunal - Tamil Nadu
Rama Spinners (P) Ltd. vs Commissioner Of Central Excise, ... on 5 October, 2001
JUDGMENT
S.L. Peeran
1. Both the stay application and the appeals (sic) in a short compass. Hence after granting waiver of pre-deposit, the appeals are taken up for disposal as per law.
2. In Appeal E/771/01 the authorities have rejected the claim of modvat credit on GP sheets (falling under sub-heading 7210.19) which has been used as a capital goods while in the manufacture of cotton yarn falling chapter sub-heading 52 of the schedule. The appellants contention that GP sheets are components, spares, accessories as the same are erected to the spinning machinery for ducting of humidification and hence are covered under Sl. No. 5 of the table under Rule 57Q (i). They relied on the judgement of the Tribunal rendered in the case of CCE, Jaipur v. Hindustan Fibre Ltd. as reported in 2000(39) RLT 1104. However, the Commissioner (Appeals) did not accept the Tribunal's judgement as according to him the judgement was rendered under 51 (A) read with Rule 57D(2). 3. In E/770/01 the item involved in electro profoils and claim that this is a capital goods falling under Rule 57 Q.
4. Ld Consultant Shri Goel files a copy of the order rendered in CCE, Jaipur v. Hindustan Fibres (supra) which has taken into consideration the prayer of grant of credit both under Rule 57A & Q and submits that the Tribunal has applied larger number of earlier judgement which granted the benefit under both the provisions of 57 A & Q.
5. He submits that Ld. Commissioner was not justified in his observations as it amounts a clear judicial indiscipline.
6. Ld. DR Shri Soundararajan, DR justified the order on the ground that the issue pertained only to grant of modvat credit as capital goods and not as an input good and the Ld. Commissioner was justified in distinguishing the judgement.
7. On a careful consideration of the submission and perusal of the judgement of the Tribunal rendered in the case of CCE, Jaipur v. Hindustan Fibre Ltd. (supra) as the issue is fully covered and the Ld. Commissioner was not justified in not following the ratio of the judgement. He clearly had committed judicial indiscipline in holding that the judgement of the Tribunal in the case of CCE, Jaipur v. Hindustan Fibre Ltd. was rendered under 51 (A) read with Rule 57D(2) as can be seen from the order which is extracted herein:
"This is an appeal filed by the Revenue. The issue relates to modvat credit. Whether modvat credit is eligible or not on G.P. Coils and sheets is an issue to be considered herein. According to the assessee modvat credit is eligible on G.P. Coils and sheets since same was brought in by them for the manufacture of A.C. Ducting which is used in the humidification plant.
Shri R. Babu, Ld. JDR appearing for the Revenue while reiterating the ground submitted that the above items are only consumables and it cannot be termed as spares, component or accessories of capital goods described under serial No. (1) to (4) of the table of the Rule 57Q (1).
On the other hand, Sh. J.P. Kaushik, Ld, Advocate appearing for the respondent submitted that during the relevant period Rule 57Q covers the chapter 84 under which humidification plant is considered as capital goods in terms of explanation herein. Parts and accessories/components are eligible to avail modvat credit. He said that the point at issue has been covered by the decision of the Tribunal in the case of Madura Coats Ltd. v. CCE, Trichy reported in 1999 (35) RLT 875 (CEGAT) wherein it was held that humidification plant and parts thereof are eligible capital goods as the same are essential for manufacure of finer count of yarn. Further, he said that the party has filed a declaration as capital goods under Rule 57Q. Even assuming that they are inputs, they are eligible to avail modvat credit in terms of Rule 57A on the declaration field with reference to the Rule 57Q, even for 57A as it was observed by the Tribunal in the case of CCE, Belgaum v. M/s. Bellary Steels and Alloys Ltd. reported in 2000 (39) RLT 346 (CEGAT). He submitted that on any view of the matter the modvat credit cannot be denied.
I find that the Commissioner has also observed in the instant case that they are eligible to avail modvat credit under Rule 57A read with Rule 57D(2) relying upon the following decision of the Tribunal:-
Kalyani Steels Ltd. v. CCE-1998 (74) ECR 884 Melton India v. CCE 1999 (105) ELT 339 CCE v. J.K. Synthetics 1999 (107) ELT 761 In the facts and circumstances since the issue involved herein has been properly analysed by the Commissioner by allowing the appeal by the party. I do not find any infirmity therein and accordingly, the appeal filed by the department is hereby dismissed."
8. On reading of the above judgement, it is very clear that modvat credit was extended under both the provisions of law and therefore there is a clear non-application of mind and the contention that Ld. Commissioner has committed judicial indiscipline by not following the Tribunal's judgement is required to be upheld.
9. For the reasons stated above, the impugned orders are set aside and appeal allowed.
(Pronounced & Dictated in Open Court)