Commissioner of Customs and C. Ex. Vs. Indian Rayons Ind. Ltd. - Court Judgment

Excerpt:
1. this appeal is filed by the revenue against the order passed by the commissioner (appeals) customs and central excise, whereby the mod-vat credit is allowed under rule 57q of central excise rules, 1944.2. shri nanak chand, ld. jdr appearing on behalf of the appellant argued that modvat credit under rule 57q of central excise rules, 1944 is not admissible on transformer as the same is not covered under the definition of capital goods. he submitted that the capital goods are defined under explanation of central excise rule 57q and are the goods which are used for processing of goods or for bringing any change in substance for the manufacture of final products. whereas the transformer in the present case is simply a device to set up or set down any voltage of electricity and is not machinery used for processing of any goods or used for bringing any change in the substances for final product.3. shri nambirajan, ld. counsel appearing on behalf of the respondents submitted that in view of the wider meaning and enlarged definition of capital goods, as can be seen from the explanation of rule 57q of central excise rules, 1944, it is clear that not only machines which are to bring about any change but also components and accessories for above machinery for the above purposes. he relied upon the tribunal's decision in appeal nos. e/1573, 1574 and 1576/96-nb decided on 15-4-1996 whereby it is held that wires and cables are capital goods covered under rule 57q of central excise rules, 1944.4. heard both sides. in the present case, the transformer in question is installed in the plant for converting the current to the minimum of 433 volts. the motors that are insulated in the plant are to be run on the current of 433 volts, but the rajasthan electricity board supplies the current of 6600 volts. in these circumstances, the ld. commissioner in the impugned order held that the transformer is the integral part of the plant and machinery. i do not find any infirmity in the impugned order. the appeal is dismissed.

Judgment:
1. This appeal is filed by the Revenue against the order passed by the Commissioner (Appeals) Customs and Central Excise, whereby the Mod-vat credit is allowed under Rule 57Q of Central Excise Rules, 1944.

2. Shri Nanak Chand, ld. JDR appearing on behalf of the appellant argued that Modvat credit under Rule 57Q of Central Excise Rules, 1944 is not admissible on transformer as the same is not covered under the definition of capital goods. He submitted that the capital goods are defined under explanation of Central Excise Rule 57Q and are the goods which are used for processing of goods or for bringing any change in substance for the manufacture of final products. Whereas the transformer in the present case is simply a device to set up or set down any voltage of electricity and is not machinery used for processing of any goods or used for bringing any change in the substances for final product.

3. Shri Nambirajan, ld. Counsel appearing on behalf of the respondents submitted that in view of the wider meaning and enlarged definition of capital goods, as can be seen from the explanation of Rule 57Q of Central Excise Rules, 1944, it is clear that not only machines which are to bring about any change but also components and accessories for above machinery for the above purposes. He relied upon the Tribunal's decision in Appeal Nos. E/1573, 1574 and 1576/96-NB decided on 15-4-1996 whereby it is held that wires and cables are capital goods covered under Rule 57Q of Central Excise Rules, 1944.

4. Heard both sides. In the present case, the transformer in question is installed in the plant for converting the current to the minimum of 433 volts. The motors that are insulated in the plant are to be run on the current of 433 volts, but the Rajasthan Electricity Board supplies the current of 6600 volts. In these circumstances, the ld. Commissioner in the impugned order held that the transformer is the integral part of the plant and machinery. I do not find any infirmity in the impugned order. The appeal is dismissed.