Customs, Excise and Gold Tribunal - Bangalore
M/S Vikrant Tyres Ltd., Mysore vs Commissioner Of Central Excise, ... on 23 August, 2001
ORDER Shri Brahma Deva, Member (J)
1. The issue relates to Modvat Credit. The representative appearing for the appellants submitted that the Modvat Credit is in respect of 68 Fairway Lamps. He said that Modvat Credit has been disallowed to the extent of Rs 3,325/- on the ground that this article is on general use and cannot be said to be capital goods within the definition of explanation to Rule 57Q. He submitted that Fairway Lamps are used in line projection which is used in the 1st stage and 2nd stage Tyre Building Machine. The Lamp will indicate the tread entering and the gaps between each components at the time of tyre building. He also contended that these electrical goods are eligible Capital Goods under Rule 57Q and in support of his contention he relied upon decision of the Tribunal in the case of India Glycols Ltd. Vs. Commissioner of Central Excise, Meerut reported in 1998 (25) ELT 496 as well as Star Paper Mills Ltd. Vs. CCE, Meerut reported in 1999 (33) RLT 417. Further he submitted that the Tribunal in the case of Jawahar Mills Ltd. Vs. Commissioner of Central Excise, Coimbatore reported in 1999 (108) ELT 47 held that wires and cables to be regarded as 'plant' being necessary for assessee to carry on his business and eligible for Modvat Credit as capital goods. This view was confirmed by the Supreme Court upholding the decision of the Tribunal observing that the definition of the 'Capital Goods' is very wide and the language used in the explanation one of the Rules 157Q is very liberal as reported in 2001 (132) ELT Pg 3 (SC).
2. Referring to the decision of Jawahar Mills Ltd. referred to above, Smt Radha Arun, SDR appearing for the Revenue submitted that in that case the Tribunal as well as the Supreme Court have taken view that wire and cable is a component of the machinery and since as much as the same has been used in the process of manufacture of finished products are eligible 'Capital Goods' in terms of Rule 57Q. She also referred to the relevant portion wherein it is observed -
"We have no difficulty in accepting the contention of the learned Additional Solicitor General that, under these circumstances, user will determine whether an item qualifies or not the requirement of clause 1(a)"
She also drew our attention that the question whether any item falls within the definition of 'Capital Goods' would depend upon the user. She contended that since the item namely 'Fairway Lamp' has not been used in the process of manufacture of the finished products namely tyre, there is no justification of allowing Modvat Credit holding that the item is eligible 'Capital Goods' in terms of Rule 57Q of the Central Excise Rules.
3. On the other hand, the representative of appellants submitted that the Fairway Lamps are used in the line projection in the process of manufacture of finished products i.e. tyres.
4. I have carefully considered the submissions made by both sides. On going through the impugned orders there is no clear finding whether the Fairway Lamps are part of line projection and line projection in turn used in the process of manufacture of the finished products i.e. tyres. This important plea was not substantiated by the assessee before the authorities and same has not been considered by the authorities below. In view of this position, the matter is required to be re-examined by the jurisdictional authority for a clear finding whether input is a part of finished products i.e. tyres. Subject to this evidence he may pass an order with reference to the Supreme Court decision referred to above on providing an opportunity to the appellant. The appellant is at liberty to substantiate his claim during the re-adjudication proceedings. Thus this appeal is disposed of in the above terms.
(Pronounced and dictated in open court)