2001 (4) TMI 486 - AT - Central Excise

CEGAT Rejects Revenue Appeal on Modvat Credit for Specific Items as Capital Goods

The Appellate Tribunal CEGAT, New Delhi rejected the revenue's appeal against the Order-in-Appeal allowing Modvat credit for specific items like ... Capital goods - Modvat credit - definition of capital goods under Section 57Q of Central Excise Rules - used for producing or processing - components, spare parts and accessoriesCapital goods - used for producing or processing - Modvat credit - Whether the items-centrifugal pump, globe valves, Multicribe 1200 series recorder and Weishaput burner model MS 72 oil hoses heating for pump-qualify as capital goods and are eligible for Modvat credit. - HELD THAT: - The Tribunal found on the facts recorded in the show cause notice that the items in question are used as machines, parts of machinery or equipment in the processing operations of the respondent, who manufactures organic chemicals. Applying the statutory definition of capital goods in Section 57Q of the Central Excise Rules, which includes machines, plant and equipment used for producing or processing to bring about a change in substance for manufacture of the final product and also covers components, spare parts and accessories, the Tribunal concluded that the listed items fall within that definition. The revenue's contentions about the functional uses of the individual items (transfer of organic liquid, regulation of flow, voltage control in laboratory instruments, and furnace oil firing for distillation) did not lead to a different legal characterisation; on the material before the Tribunal they were integral to processing and manufacturing and thus qualify as capital goods.Appeal rejected; benefit of Modvat credit allowed in respect of the specified items as capital goods.Final Conclusion: The appeal by the revenue was dismissed; the Commissioner (Appeals) was upheld in allowing Modvat credit by treating the specified items as capital goods within the statutory definition under Section 57Q of the Central Excise Rules. The Appellate Tribunal CEGAT, New Delhi rejected the revenue's appeal against the Order-in-Appeal allowing Modvat credit for specific items like Centrifugal pump, Globe valves, Multicribe 1200 series twelve point tem Recorder, and Weishaput Burner Medel MS 72 oil Hoses. The Tribunal ruled that these items qualify as capital goods under Section 57Q of Central Excise Rules as they are used in processing the final product of organic chemicals.