WHETHER CABLE UNDER CHAPTER 85 IS ACCEPTED AS CAPITAL GOODS BY CE DEPARTMENT

[PRADEEP GARG]

Dear Sir,

We are SHIS Scrip holder granted by DGFT, for procurement of any capital goods under chapter 82, 84, 85 & 90 of CE Tariff Act without payment of duty but to be debited from the scrip as per procedure laid under Notification No. 33/2012-CE dated 09.07.2012. We intend to procure huge cable under chapter 8544 for installation 33KVA station inside our factory. When we approached one of the manufacturer of these cables located at Rajasthan, covered under LTU, denied to supply the cable without payment of duty under SHIS scrip with the reason that their jurisdictional Excise Department has different view on cable i.e. they do not consider cable as capital goods and since as per Notification No. 33/2012-CE dated 09.07.12, only capital goods can be procured under the scrip, this material can be supplied on payment of duty.

When Rule 2(a) of CCR, 2004, specifically says :

1. Capital Goods means “ All goods falling under chapter 82, 84, 85, 90 of the first schedule to the Excise Tariff Act.
2. …………..
3. Components, spares and Accessories of the goods specified at (i) and (ii)

From the above, it is quite clear that if any item having any nature falls under above said tariff chapters, they are by default covered under the definition of CG. As far as explanation (A) for the purpose of Notification No. 33/2012-CE, “capital goods” means any plant, machinery……………….., there is no where specifically mentioned that any goods having specific nature like wire (Chapter-8544) does not qualify the definition of capital goods for this notification then how the cable cannot be considered as capital goods.

Awaiting valuable advise in the matter.

Regards,

PRADEEP GARG

08979000859

AI Summary

Debate Over Cables as Capital Goods: Excise Duty Exemption Dispute Under SHIS Scrip Scheme and Rule 2(a) CCR, 2004 A discussion on whether cables under Chapter 85 qualify as capital goods for procurement without excise duty under the SHIS Scrip scheme. A party intends to procure cables for a 33 KVA station, but the supplier's jurisdictional Excise Department does not recognize cables as capital goods, contrary to Rule 2(a) of CCR, 2004, which includes goods under Chapters 82, 84, 85, and 90. Several contributors argue that cables should qualify as capital goods since they are essential for factory operations. Suggestions include appealing to higher authorities or litigating if the Excise Department disagrees. A cited case suggests sector-specific limitations under the SHIS scheme.