TaxTMI 
TaxTMI 
1997 (12) TMI 332
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....Excise Tariff Act, 1985. Scrutiny of the RT 12 returns filed by the appellants indicated that in the month of April, 1995, the appellants took credit of Rs. 2,11,358.65 on capital goods claiming that they were used for the manufacture of bulk drugs and proprietary medicaments. They also utilised the said credit for the payment of duty on the final products. The department alleged that the items on which modvat credit as capital goods was taken were not machines, machinery, plants, equipments, apparatus, tools, appliances, components, spare parts and accessories used for producing or processing of the goods or for bringing about any change in any substance for the manufacture of final products as required under Rule 57Q of the Central Excise....
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.... which Modvat credit has been denied to them. He submits that the facts appeal-wise and item-wise are as under :- Appeal No. E/990/97-NB - Electric Cable/Power Cable : It is used for carrying current to various places which is further used in the process of manufacture of goods. This view is supported by the following decisions of this Tribunal :- (a) M/s. Kanoria Chemicals & Industries Ltd. v. CCE [1997 (95) E.L.T. 301] (b) M/s. Jaypee Rewa Cements v. CCE [Final Order No. 823/97-NB - 1997 (96) E.L.T. 167 (Tribunal)]. 5. Shri Y.R. Kilanyia, learned JDR appearing for the Revenue submits that Electric Cable/Power Cable are the items of general use and are not specific to any plant and machinery; that they are using ....
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....patible for use in the manufacture of goods. Moreover these goods are all required, so that they can be protected from bacteria. 11. The learned JDR submits that these are general utility items and that nothing has been brought on record to show as to how they were specifically designed so as to make them technically compatible for use in the manufacture of goods. He, therefore, submits that Modvat credit will not be admissible on these items. 12. I have heard the submissions of both sides. I find that capital goods have been defined in Explanation (1)(a) to Rule 57Q as machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any s....
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....s which are basically used to provide desired flow and pressure during the process of manufacture of bulk drugs which are contained in the cylinders; that these gas cylinders are connected directly to the pipeline fitted to the plant; that they are used basically for producing or processing of goods, therefore they are part of the plant. In support of this contention, the learned Counsel cites and relies upon the decision of the Hon'ble Bombay High Court in the case of CIT v. Electro Metallurgical Works Ltd. [1994 (207) ITR 494]. 16. The learned JDR submits that cylinders are general utility items and can be used anywhere, they are not subjected to plant and machinery required in the manufacture of bulk drugs. He, therefore, submits....
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....o with the production of goods. 24. On careful consideration of the submissions of both sides and use of the item, I hold that Static Convertor is a part of plant, it can be treated as equipment also and capital goods under Rule 57Q. 25. As regards Electric Cables, I have already held that Electric Cables are used inside the factory premises and they are capital goods for the purpose of Rule 57Q. 26. Appeal No. E/992/97-NB - PTFE Hose and Flexible PTFE Line pipe fitting - the learned Advocate submits that basically these are used to transfer corrosive, hazardous materials like HCL, Sodium Hydroxide inside the plant. 27. Looking to the use of the items, I hold that they are part of the plant and can be termed ....