Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs The India Cements Ltd. on 18 January, 2006
ORDER T.V. Sairam, Member (T)
1. There are five appeals having identical issue.
2. In respect of appeal Nos. E/851/04, E/877 and 878/04, the Modvat credit was sought to be denied by the Revenue for the components used for fabrication of (i) crusher plant (ii) diesel generator set and (iii) conveyor system. In respect of Appeal Nos. E/880/04 and E/1026/04, the credit was sought to be denied for the components used for the fabrication of Crusher plants and Diesel Generator set.
3. The appellant (Revenue) is challenging the orders of the Commissioner (Appeals) in which it was held that the respondents, The India Cements Limited, are eligible for Modvat credit in respect of the said components. The reasons advanced by the Revenue for the proposal to deny the Modvat credit are two fold: (i) since the final products are exempted from payment of duty, credit of duty in respect of the components is not permissible and (ii) in respect of iron and steel items, the same are not specified in Rule 57Q of the Central Excise Rules, 1944.
4. Reliance was placed by the ld. SDR, appearing for the appellant, mainly on the following two decisions of the Tribunal.
a) Bazpur Co-op. Sugar Factory Ltd. v. CCE, Meerut 2002 (150) ELT 133 (Tri.Del)
b) Century Cement v. CCE, Raipur 2002 (150) ELT 1065 (Tri.Del)
5. In the case of Bazpur Co-op. Sugar Factory Ltd (supra) it was held that M. S plates, angles and channels used in the manufacture of steel tanks, used to store the final products viz. sugar and molasses, are not eligible for capital goods credit as they do not bring about any change in substance of goods in the manufacturing stream and do not satisfy the requirements of Rule 57Q of erstwhile Central Excise Rules, 1944. In the case of Century Cement (supra), it was held that structure, having only function to provide support to ESP Hopper, not eligible to be capital goods.
6. Appearing on behalf of the respondents ld. Counsel pleads that parts, components and spares used for capital goods, viz. generator sets, crusher plant, conveyor system etc. are eligible equipments. The credit should therefore be admissible to them under Rule 57Q(1). He relies on this Bench's decision vide Final Order No. 1514/05 DT.29.11.2005 in the respondent's appeal No. E/1024/04 which held that generator set and crusher were eligible capital goods for Modvat credit under Rule 57Q(1) and that the parts and components in question used in the fabrication of these capital goods should be extended of the benefit of Sl.No. 5 in the Table annexed to Rule 57Q(1).
7. In yet another case of their own, the Tribunal held that the appellants are entitled for the credit of duty on M.S angles, channels and plates used for fabrication of plants (Final Order No. 333/04 dated 29.3.2004 in Appeal No. E/414/03 refers). Though according to Revenue, the Notification No. 67/95 prevents availment of credit on components there are decisions which have challenged this stand of the Revenue:
(i) DG sets, parts, components and accessories of DG sets are capital goods in terms of Rule 57Q of CE Rules, 1944. Even if the DG sets which have been manufactured out of these parts and components and accessories have not discharged duty liability, there is no bar to availment of Modvat credit on duty paid on such parts, components accessories" [Gujarat Ambuja Cements Ltd. v. CCE, Chandigarh ].
"(ii) Intermediate product 'Bus-bar' was exempted from duty in terms of Notification No. 67/95-CE. Classification list filed shows that bus bar is captively consumed. Bus-bar is an intermediate product and is eligible to benefit of credit of input itself in terms of Rule 57D(2) of erstwhile Central Excise Rules, 1944" [Hindalco Industries Ltd. v. CCE, Allahabad reported in 2002 (150) ELT 1218 (TRI.DEL)].
"(iii) Language used in Explanation (I) of Rule 57Q is very liberal"- CCE, Coimbatore v. Jawahar Mills Ltd .
8. I have examined the records and heard both sides. The ratio arrived at in various decisions/judgments referred to by the ld. Counsel for the Respondents has made it clear that the components, spares etc., used for Generator set, cursher plant, conveyor system etc. are eligible capital equipment and credit in respect of them is admissible under Rule 57Q(1) of the CE Rules, 1944. I do not therefore find any ground to interfere with impugned order. In view of the above, five appeals filed by the Revenue are dismissed.
(Order dictated and pronounced in open Court)