Cce Chandigarh Vs. Steel Strips Ltd. - Court Judgment

Excerpt:

.....has taken the view that under the explanation (1) to rule 57q, the expression "capital goods" is defined as machines, machinery, plant, equipment, apparatus, tools or appliances of any catagory but: 2. used for processing any goods for the manufacture of final product; or 3. used for bringing about any change in any substance for the manufacture of final product.4. it is further held in the above decision that the items mentioned in clause (c) of the aforesaid explanation viz; moulds and dies, generating sets and weigh bridges used in the factory of the manufacturer are also entitled to be considered as capital goods. it is observed that the issue relating to the availability of modvat credit on the impugned goods has not been examined by the lower authorities in the light of the above decision, therefore the order passed by the lower appellate authority is set aside and the matter is remanded to the original authority for re-consideration. the respondents shall be afforded reasonable opportunity of hearing before arriving at the final decision in the matter in de-novo adjudication.

Judgment:

1. The respondents manufacture the goods falling under Chapter 72.

During the month of August, 95 they availed modvat credit amounting to Rs.22,521.26 on the capital goods viz, plain plates, cut off, wheel, GC sheets, Centrifugal Air Blower, Ceramic fibre blanket, welding electrods etc. The Assistant Commissioner of Central Excise, Chandigarh vide his Order dated 19.3.97, denied the modvat credit of the aforesaid amount under Rule 57U of the Central Excise Rules, 1994.

2. On appeal the Commissioner (Appeals), Chandigarh vide his order dated 15.12.98 allowed the appeal of the respondents on plain plates and rounds for the amounting of Rs.4460.92. He, however, rejected the appeal for the credit on GC sheets.

3. The Revenue are in appeal against the above order of Commissioner (Appeals). I have heard Shri A.K.Jain, JDR for the appellants. The respondents are not represented. Shri K.K.Anand, Adv. on their behalf has send a letter dated 15.2.2001 in which it is stated that he is suffering from high fever and therefore, the matter may be adjourned to nay other date. It is observed that this matter has been adjourned time and again on nine occassions earlier and therefore, I am to inclined to grant any further adjournment. The matter relating to the availability of the modvat credit on the capital goods now stands finally settled vide Larger Bench decision of the CEGAT in the case of CCE Indore Vs Surya Roshni 2001 (128) ELT 293 (T-LB). In this decision, the Larger Bench of CEGAT has taken the view that under the Explanation (1) to Rule 57Q, the expression "Capital Goods" is defined as machines, machinery, plant, equipment, apparatus, tools or appliances of any catagory but: 2. used for processing any goods for the manufacture of final product; or 3. used for bringing about any change in any substance for the manufacture of final product.

4. It is further held in the above decision that the items mentioned in clause (c) of the aforesaid Explanation viz; moulds and dies, generating sets and weigh bridges used in the factory of the manufacturer are also entitled to be considered as capital goods. It is observed that the issue relating to the availability of modvat credit on the impugned goods has not been examined by the lower authorities in the light of the above decision, therefore the order passed by the lower appellate authority is set aside and the matter is remanded to the Original Authority for re-consideration. The respondents shall be afforded reasonable opportunity of hearing before arriving at the final decision in the matter in de-novo adjudication.