2001 (2) TMI 685

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.... is otherwise known as Surface Finish Testing Machines by treating it as Capital Goods. The Department's view is that the said machine is an independent electronic test unit which does the function of testing the base materials, i.e. raw materials and the thickness of goods manufactured at every stage during the process; that it does not bring about any change in the final products nor can it be termed as a machine used for producing or processing of goods and therefore cannot be given the status of capital goods. However, the Department's views in the show cause notice was not accepted by the Assistant Commissioner after considering the detailed reply given by the assessee with regard to the function of the machine and explanation given th....

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....ld not be marketable and would cease to be "goods" at all. Therefore, after detailed analysis of the definition of Capital Goods and having function of the machine vis-a-vis the definition "process" and in the light of the Calcutta High Court judgment in the case of Sri Om Prakash Gupta v. Commissioner of Commercial Tax reported in (1965) 16 (STC) 935 he has uphold the assessee contention that the machine is within the definition of Capital Goods under Rule 57Q of the Central Excise Rules. The Commissioner after examining the grounds of the Revenue rejected the Revenue Appeal on his finding that the testing is done on different stages to maintain the quality of the manufacture. He has noted that in the circumstances the machine has to be co....

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....ng and testing of various inputs as well as finished products being essential process in completion and manufacture of final products namely Dry Cell Batteries; that in that case machine is to be considered as capital goods. He submits that this finding has not been contested in the grounds of appeal and therefore the appeal is rejected. 3. On careful consideration and perusal of both the sides arguments and records, I am satisfied that the original authority i.e. Assistant Commissioner has gone into great detail on the function of the machine and has found that the name testing machine is misnomer and in fact the machine works along with the coating machine and is essential for the manufacture of abrasives. The detailed findings gi....