1996 (8) TMI 291

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....d accessories are concerned, I find that they have been installed in the factory in June, 1994 after the amendment to the 2nd proviso to Rule 57S according to which the concept of capital goods has been enlarged to include goods `used in or in relation to the manufacture of the final product'. This expression as has been hold by many judicial pronouncements, has wider scope than the expression `used in the manufacture of final products'. Inasmuch as the humidification plant is required for maintaining proper humidity in the spinning plant, I consider the same as eligible for Modvat credit. 3. The revenue is aggrieved of the findings of the learned C.C.E. (Appeals) and has urged as under in the grounds of appeal. 4. In the in....

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....idification has necessarily to be done in the textile plant for production and also for ensuring certain level of quality of the goods produced. He has pleaded that humidification plant has a nexus with the production of the goods and therefore, the benefit of Modvat credit should be allowed. 6. We have considered the pleas made by both the sides. Rule 57Q for the purpose of convenience of reference is reproduced below : "RULE 57Q. Applicability. - (1) The provisions of this section shall apply to finished excisable goods of the description specified in the Annexure below (hereinafter referred to as the "final products") for the purpose of allowing credit of specified duty paid on the capital goods used by the manufacturer in his....

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....earned DR for the Department, the definition of capital goods as set out under the rules is restrictive and the words used are that capital goods should be such as are used for production, processing or for bringing out any change in the substance for the manufacture of the final products. The three words used in the rules viz. production, processing or for change in the substance would go to show that the capital goods have to be used as one in which the process and manufacture or change in the products are brought about. The term production and process as set out in the Oxford Dictionary are reproduced below for convenience of reference :  Process' n 1. Progress, course; in ~ of time, as time goes on; natural or involuntary operat....