Customs, Excise and Gold Tribunal - Mumbai
Ratanmani Metals And Tubes Ltd. vs Commissioner Of Central Excise on 23 September, 2003
ORDER
Gowri Shankar, Member (Technical)
1. Appeal taken up for disposal with the consent of both sides, after waiving deposit.
2. The common question for consideration in these two appeals is whether the appellant was eligible to take credit on the duty paid on storage tanks that it utilised in its factory under Rule 57Q by the appellant towards manufacture of pipes and tubes. In the common order impugned in these appeals, the Commissioner (Appeals) has held that credit was not available.
The notice issued to the appellant proposed to deny the credit on the ground that storage tanks of plastics that were received by the appellant from the manufacturer which were classifiable in heading 3925.10 of the tariff were not included in the definition of capital goods contained in Rule 57Q. Adjudicating on the notice, the Deputy Commissioner confirmed the proposal in the notice, that the law then stood when the credit was taken in December 1999 storage tanks were not part of the definition of the term capital goods contained in Rule 57Q. Disposing of the appeals against this order, the Commissioner (Appeals) dismissed the appeals.
3. The sole contention of the counsel for the appellant is that the storage tanks are used for "pickling" the tubes and pipes that the appellant manufacturer. The tanks are used to remove the stains that formed on the pipes and tubes when they were manufactured by submerging them in a bath of chemical (unspecified). Pickling is therefore crucial for the manufacture of pipes and tubes and the goods are therefore essential part of the appellant's machinery without which the pipes and tubes cannot be manufactured. He relies upon the decision of the Tribunal in STS Chemical Ltd v. CCE 2001 (132) ELT 704, CCE v. P.G. Foils Ltd 2000 (120) ELT 127 and the decision of the larger bench of this Tribunal in Jawahar Mills Ltd v. CCE, Coimbatore 1999 (32) RLT 379. He further contends that the Commissioner (Appeals) has dismissed the appeal on a point totally extraneous to the issue, that the goods were not capital goods because they were not integral part of the plant. Although he initially attempted to argue on limitation, he subsequently submitted that he was not pressing this point.
4. As Sub-rule (1) of Rule 57Q stood in December, 1999 when the credit was taken, it described the goods generally prescribed goods by the tariff or by the description. Thus all goods falling in heading 82.02 to 82.11, moulds and dies, for examples, were capital goods. In none of the serial numbers of the table are goods under consideration specified. The goods therefore did not fall within the definition of capital goods as contained in the rule. In that situation, I do not find it possible to agree the sole fact that the goods were used for, and. essential to the manufacture of the finished product, renders them eligible for consideration as capital goods. Sub-rule (1) of Rule 57Q is clear that the provision of Section AAAA referring to credit of duty paid on capital goods used by the manufacturer of specified goods would apply to capital goods described in column 2. It cannot therefore apply to anything not specified therein.
5. The decision of the larger bench of the Tribunal in Jawahar Mills Ltd v. CCE, Coimbatore 1999 (32) RLT 379 related to a situation concerned with the definition of capital goods, not as it stood in December 1999, with which I am concerned in this appeal, but to an earlier during the period when the definition was such as to include machine, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing any goods or for bringing about any change in any substances for the manufacture of the final product. The larger bench of the Tribunal was concerned with the question as to whether such goods on electric wires and cables which it was alleged by the department was specified. "The requirement for bringing about any change in any substance would qualify for consideration as capital goods. The decision of the larger bench cannot apply to a situation in which capital goods were defined in a completely different manner. By applying the provisions of Rule 57Q (1) as it stood at the relevant time, only those goods which were specifically described in the table to the definition would qualify consideration as capital goods.
6. I therefore do not find it possible to say that the Commissioner (Appeals) has dismissed the appeal against the order of the Deputy Commissioner solely on the ground that the goods were not used as a part of the plant. In paragraph six of the order he says "the function is not such that it used as an integral part of the plant and thus cannot be treated as a capital goods," However, he goes on to say "Moreover, also applying the ratio of the CEGAT in the case of Parle Biscuits Ltd v. CCE, Jaipur 2003 (145) ELT 724 based on larger bench decision in CCE, Indore v. Surya Roshni Ltd 2001 holding mat storage tanks were not specified as eligible capital goods under Rule 57Q during the material period, the appeal is dismissed."
7. I therefore do not find any ground for interference.
8. Appeals dismissed.