2006 (1) TMI 429 - AT - Central Excise

Tribunal Upholds Benefit of Notification No. 67/95-C.E. for Capital Goods in Manufacturing

The Tribunal upheld the Order-in-Appeal granting the benefit of Notification No. 67/95-C.E. for capital goods used in manufacturing the final product. It ... Capital goods Issues:1. Interpretation of Notification No. 67/95-C.E. regarding benefit for capital goods.2. Classification of components and parts under Chapters 84, 85, and 73 of Central Excise Tariff.3. Definition of capital goods under Rule 57Q of Central Excise Rules.4. Applicability of Board's Circular dated 2-12-96 on parts of specified goods.5. Entitlement of goods falling under Chapter 73 for the benefit of notification.Analysis:1. The appeal was filed by the Revenue against the Order-in-Appeal granting the benefit of Notification No. 67/95-C.E. for capital goods used in manufacturing the final product. The Revenue contested that the claimed components and parts were classified under Chapter 73, not covered in the definition of capital goods.2. The Respondents argued that Rule 57Q defines capital goods to include specified goods and their parts, manufactured and used in the factory of production. They relied on the Board's Circular from 2-12-96, stating that parts of specified goods, regardless of classification, are considered capital goods. The goods in question fell under Chapter 73 but were covered in the notification's description of specified goods.3. The Tribunal found that the Respondents manufactured capital goods and their parts in their factory for use in production. The Revenue's objection based on the parts falling under Chapter 73 was dismissed. Rule 57Q includes specified goods and their parts in the definition of capital goods. The Circular clarified that parts, components, and accessories used with capital goods are entitled to the benefit, irrespective of classification.4. The notification specified goods manufactured and used in the factory of production for the benefit. Since the goods in question were covered under the specified goods in the notification, the Tribunal found no issue with the lower order and rejected the appeal. The judgment emphasized the broad interpretation of capital goods to include parts of specified goods, in line with Rule 57Q and the Board's Circular.This detailed analysis of the judgment highlights the key issues addressed by the Tribunal regarding the interpretation of the notification, classification of goods, definition of capital goods, and the applicability of relevant rules and circulars in determining eligibility for benefits.