1998 (6) TMI 272

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....ion in terms of Rule 57T of the Central Excise Rules, 1944 for taking credit on certain declared capital goods under the Modvat scheme. The Department sought to dis-allow Modvat credit on six items of capital goods, namely (a) refractory ceramic goods, such as bricks, blocks and tiles; (b) refractory cement; (c) concrete; (d) mortar; (e) Mould for metals (other than ingot moulds), metal carbides, glass mineral materials, rubber or plastics and (f) Electro cast refractories on the ground that the said items were construction materials used for the upkeep and maintenance and lining of the furnace which basically did not bring about any change in the manufacture of final product. The first adjudicating authority dis-allowed the Modvat credit o....

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....ugh refractory items had been included in the category of capital goods specifically only with effect from 16-3-1995, they were in fact capital goods at all times and it was only with a view to give clarity and to avoid disputes that refractories had been mentioned in Explanation portion of Rule 57Q by the amended Notification from 16-3-1995. It was, therefore, wrong on the part of the Commissioner (Appeals) to have held that refractory items became eligible for Modvat credit as capital goods only from 16-3-1995. As regards mortar and cement, ld. Counsel submitted that the said items were eligible for Modvat credit under Rule 57A as they were used in relation to the manufacture of glass and glassware. Alternatively, ld. Counsel also submitt....

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.... the final product. He also referred to the Tribunal decision in Malvika Steels [1998 (97) ELT 530 (Tri.)]. In a further written submissions filed by the ld. Counsel he submitted that the decision in Jindal Strips Limited v. CCE, Raipur, 1998 (98) E.L.T. 747 (Tribunal) = 1997 (23) RLT 69 directly covers the items in dispute. He has also invited reference to the Apex Court decision in Commissioner of Income Tax, Madras v. Mahalakshmi Textile Mills Ltd. reported in Vol. 66 Income Tax Reports page 710 in which expenditure incurred for repair of machinery and plant was held as an allowable expenditure under the Income Tax Act. 6. We have considered the submissions and have gone through the case law referred to by the ld. Counsel and the l....