2006 (7) TMI 421

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....ained denial of credit to various goods by the original authority which the appellants had claimed to be capital goods eligible for Modvat credit. 2. Heard both sides. Credit was denied on various items but the appellants have challenged the orders only as regards the following items in respect of appeal No. E/537/05 :- (1) UPS and Battery :- Credit was disallowed on these items on the ground that they were not capital goods. We find that these items are required for supply of standby power in the event of power failure in the plant. These are not consumable items and are essential for the working of the plant. They are capital goods as defined in Explanation 1 of Rule 57Q. (2) Tubes, Pipes and Fittings :- Credit for....

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....e centralised lubricating system enables smooth functioning of various machinery in the plant and has to be treated as an essential accessory to these machines eligible to capital goods credit. (5) Blower Fans, dedusting fans, air blower :- These items were denied credit for the reason that they were parts of the power plant which generated electricity. Power is essential for the functioning of the steel mill and these parts of power plant located within the factory are capital goods as per explanation (1) of Rule 57Q. These items have already been decided to be eligible for credit as capital goods in the assessee's own case, CCE. v. Southern Iron & Steel Co. Ltd. [2000 (121) E.L.T. 164 (Trib.)]. (6) Whyheat-C : This materia....

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....t of this item is treated as withdrawn. The appeal is disposed as above. 3. The following items are covered by Appeal No. E/539/2002 (1) Tubes, Pipes and Fittings :- The impugned goods had been received during the period 1994 - 95. Credit was disallowed for the reason that pipes were specifically included for capital goods credit with effect from 23-7-1996. Pipes are used to carry water, air or steam to various machines at different points within the factory. They are eligible for capital goods credit. (2) Refractory Bricks :- Credit was disallowed as the item was specified for capital goods credit with effect from 16-3-1995 and as the subject goods had been received earlier to that date. Refractory bricks form part ....