1998 (7) TMI 169

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.... justice. On merits also Modvat credit on lubricants was admissible. Hetro Fit being part of the weigh bridge is also entitled to Modvat credit. But steel for molasses tank cannot be called a capital goods under Rule 57Q and so Modvat credit shall not be available on them. Appeal is thus allowed partly. The adjudicating authority is directed to pass proper speaking order in future after following principles of natural justice. 2. The facts, briefly stated, are that the Appellants are manufacturers of Sugar. They filed a declaration, claiming Modvat credit on steel sheets for molasses tank. The Department alleged that Modvat credit can be allowed only in respect of goods as covered by the Explanation 1(a), (b) and (c) provided under ....

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....of Rule 57Q, the definition in Explanation 1(a) of capital goods, as meaning machines, equipments, apparatus, tools, appliances used for producing or processing the goods, etc., clearly indicate the intention of the rule making authority to give the wider meaning to the expression `Plant' but to give a narrower meaning which is suitable in the context, `Plant' therefore, could be regarded as machine or group of machines fitted in such a manner as to serve the purpose of manufacturing any particular product, and the whole system of machines has to be regarded as Plant. The ld. Counsel further submitted that in the case of CCE v. Rajasthan State Chemical Works [1991 (55) E.L.T. 444], the Apex Court held that the process of handling/lifting/pu....

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....nt or the steel structurals could be construed to be a component part of the machines or accessory for a machine. It is a part of the civil work required for erecting the machinery. These materials cannot also be construed to be component parts of the plant, because these are constructional materials required for erecting the building or for standing the machinery on a concrete foundation. Under Rule 57Q of the Central Excise Rules, 1944, Capital Goods such as machine, machinery, tools etc. required for producing or processing of the goods including components and accessories therefor are allowed Modvat credit. The concrete foundation for erecting a machinery can neither be construed to be a component or accessory nor such a foundation be c....