Customs, Excise and Gold Tribunal - Delhi
Parle Biscuits Ltd. vs Commissioner Of Central Excise on 17 July, 2002
Equivalent citations: 2002ECR653(TRI.-DELHI), 2002(145)ELT724(TRI-DEL)
ORDER P.G. Chacko, Member (J)
1. The Appellants, who were engaged in the manufacture of biscuits, purchased and installed storage tanks in their factory for the purpose of storage of sugar syrup and compressed/liquefied gas and took Mod-vat credit, amounting to Rs. 1,73,425/-, on such tanks in March, 2000, treating the goods as capital goods under Rule 57Q. The department proposed to disallow the credit, alleging that the said tanks were not eligible capital goods under Rule 57Q as the rule stood at the material time. Both the adjudicating authority and the lower appellate authority upheld the department's stand and disallowed the Modvat credit. Hence the present appeal.
2. Heard both sides.
3. Ld. Counsel for the appellants claimed that the tanks under reference could legitimately be included in the category of modvatable capital goods under Rule 57Q as, according to him, they were covered by "machine, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or bringing about any change in any substance for the manufacture of any goods". In support of this submission, Counsel relied on the decision of the Supreme Court in CCE v. Jawahar Mills Ltd. [2001 (132) E.L.T. 3 (S.C.)]. He also relied on this Tribunal's decisions in the cases of Dabur India Ltd. v. CCE [1998 (98) E.LT. 674], S.R.F. Ltd. v. CCE, Jaipur [1999 (106) E.LT. 317 (Tribunal)] and NRC Ltd. v. CCE, Mumbai-III [2001 (137) E.L.T. 362 (Tribunal) = 2001 (97) ECR 371 (Tribunal)], wherein storage tanks were held to be eligible capital goods for Modvat credit under Rule 57Q.
4. Ld. DR, on the other hand, submitted that, under Rule 57Q as it stood during March, 2000, only those capital goods which were specifically mentioned under the rule could be held to be eligible for Modvat credit and that the storage tanks under reference, which were admittedly falling under Chapter 73 of the Schedule to the Central Excise Tariff Act and not specified under the rule, were not eligible for Modvat credit. The DR further submitted that it was only w.e.f. 1-3-2001 that storage tanks were included in the category of capital goods eligible for Modvat credit by way of Notification No. 6/2001-C.E. (NT), dated 1-3-2001. This Notification had no retrospective effect and therefore, the benefit of this Notification would not accrue to the appellants in respect of the period in question (March, 2000). The DR, in this connection, relied on this Tribunal's Larger Bench decision in CCE, Indore v. Surya Roshni Ltd. [2001 (128) E.L.T. 293 (Tribunal-LB)].
5. Considered the submissions.
6. The period in question is March, 2000. Under Rule 57Q as it stood during the said period, goods falling under Chapter 73 of the Schedule to the Central Excise Tariff Act were not specified for the purpose of Modvat credit. Admittedly, the storage tanks in question were falling under Chapter 73. The definition of capital goods stated by the counsel was not there under Rule 57Q during the period and, therefore, I am unable to accept the Counsel's arguments. In the case of Surya Roshni (supra), the Larger Bench held, inter alia, that the question whether any goods could be held to be eligible capital goods for Modvat credit under Rule 57Q should be decided in terms of the express provisions of the rule. Following the Larger Bench ruling, I find that the goods under reference were not specified as eligible capital goods under Rule 57Q during the material period, and hold that the goods were not eligible for capital goods credit. Accordingly, the impugned order is sustained and the appeal is rejected.