1999 (10) TMI 222

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....ngly availed Modvat credit amounting to Rs. 1,39,802/- on certain goods i.e. automatic data processor, metal flexible and elbow fitting etc. treating the same as capital goods under Rule 57-Q ibid in the months of December, 1995 and accordingly issued show cause notice to them proposing to recover the aforesaid amount and also to impose penalty. In adjudication of the show cause notice, the Assistant Commissioner of Central Excise disallowed the above Modvat credit and confirmed the demand of the aforesaid amount and also imposed penalty of Rs. 20,000/- on the respondents. In the appeal filed by the party against the order of the Assistant Commissioner, lower appellate authority reversed the adjudicating authority's finding and allowed the ....

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.... the case, wherein the function of the goods in question have been explained as follows :- "DATA PROCESSOR :- This is an Electronic device installed in the ring frame machine for monitoring spindles of ring frame and is installed to know stoppage, defective spindles breakage of yarn, so that working of ring frame machine can be verified, without stopping the ring frame. Complete data is available on the monitor of the said processor and necessary action is taken through this device to control the working of the ring frame machine. The aforementioned machine falls under Tariff Heading 8448.10 of the Central Excise Tariff Act and presently falls within specified tariff headings as provided under Rule 57Q. Certificate in this regard enclose....

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....ne, cost of down time will be higher and higher. Therefore realising the cost of down time it has become essential to have automatic control system on a Ring frame to achieve better utilisation of the machine. 4. The learned JDR has not disputed the authenticity of the opinion expressed by the Director of Northern India Textile Research Association in the aforesaid letter. Therefore, I find that the grounds of the present appeal are not tenable and, in the light of the function of automatic data processor as explained hereinbefore, I hold that the said item is a process control instrument or equipment used in the spinning mill of the respondents and hence would come within the scope of 'capital goods' under Explanation to Rule 57-Q ....