TaxTMI 
TaxTMI 
1998 (3) TMI 330
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....hin the ambit of Rule 57Q and hence Modvat credit on both the items have been rightly denied by the lower authority. Along with the two items, there are 3 other items which are used as spare parts which have also been denied benefit on the ground that wagon loader itself is not capital goods and spare parts also do not get the benefit. These spare parts are : (a) cables used for wagon loader (b) electric spares for wagon loader (c) electric spares used in energy meter 2. Before the Commissioner, the appellants had relied on the Supreme Court judgments rendered in the case of M/s. Eastend Paper Industries Ltd. v. CCE reported in 1989 (43) E.L.T. 201 and that of CCE v. M/s. Rajasthan State Chemical Works report....
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....said understanding was clarified by issue of Notification No. 14/96-C.E. (N.T.), dated 23-7-1996 and again it was incorporated by Notification No. 6/97, dated 1-3-1997. It is his contention that the definition of the term capital goods as in Explanation 1(a) appearing during the period 1994 as well as 1995 was replaced in the subsequent Notification No. 14/96-C.E. (N.T.), dated 23-7-1996. This notification does not have the said definition of capital goods as was present in the earlier Rule 57Q which delenated the definition as incorporated above. It is his submission that the present notification in existence only states capital goods means following goods falling within the schedule to the Central Excise Tariff Act, 1985 and used in the f....
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....nt and, therefore, it clearly fell within the ambit of definition of capital goods. 6. Countering the arguments of the ld. Advocate, Shri Rama Rao, the ld. JDR submits that for considering the item wagon loader as a capital goods it has in the first instance to fall within the definition of the term `capital goods' as was in existence in 1994, which means that it has to be goods which are in the nature of machines, machinery, plant, equipment, apparatus or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products. It is his submission that admittedly the item is used after RG 1 stage and the goods are being removed from the Bonded storeroom. The g....
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....On being pointed out that this judgment does not deal with the retrospective nature of the notification, the ld. DR concedes this point and states that this judgment has not dealt with the points in the earlier judgment of the Tribunal as in the case of J.K. Synthetics cited supra. He also quotes this Bench Order No. 2658/97 as in the case of CCE v. Swastik Enterprises, wherein, the Bench expressed the view that in the background in which the reasoning has been made therein, it has to be held that Notification No. 14/96 could not be taken to be clarificatory in nature so far as the question of availability of Modvat credit in respect of generator sets is concerned and the said decision of the Tribunal in the case of J.K. Synthetics is to be....
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....bmissions, I find merits in the submissions made by the ld. Consultant. At the outset, I notice that the Notification No. 14/96, dated 23-7-1996 has been held to be having retrospective effect. It follows that the wordings which were there in Explanation 1(a) of Rule 57Q with regard to the term capital goods as delenated above has since been replaced and in its place capital goods means goods which are used within the factory itself and which fall within the chapter heading indicated therein. It is clear that this Chapter Heading 84.28 and 68.01 both find its place within the definition of capital goods in terms of Notification No. 14/96. Therefore, in terms of the Notification No. 14/96, both the items will be entitled to the benefit of Mo....