TaxTMI 
TaxTMI 
2007 (8) TMI 565
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.... Style, Asbestos Rope, Low Pressure Jointing Sheets etc. According to the Revenue, these goods did not qualify under the definition of 'Capital Goods' under Rule 57Q of the erstwhile Rules during the relevant period. These items were used for day-to-day repairing and maintenance work, and were not used in the manufacture of final products. A show cause notice was, therefore, issued on 27-10-1999 for recovery of the Modvat credit wrongly taken and proposing penalty. 2.1 According to the appellant, the items in dispute were capital goods. The adjudicating authority held that, Welding Electrodes were consumables and used for the purpose of repair and maintenance, and were not eligible for capital goods. This view, taken by the Tribunal in CCE, Noida v. M/s. DSM Ltd., vide Final Order dated 27-5-2003 [2003 (162) E.L.T. 987 (Tribunal)] (in the appellant's own case), was followed by the adjudicating authority. As regards the items Angle, Channel, Plates, Bar etc., which were said to have been used as parts/components/accessories for supporting 80 Ton Pan, which was essential for manufacture of sugar, by following the decision of the Tribunal in the appellant's own case (CCE, Noid....
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....r the period from April, 2002 to December, 2002 proposing denial of Modvat credit of Rs. 3,57,043/-, wrongly availed by the assessee in respect of Welding Electrodes, Tore Steel, HR Coils, H Beam, Plates, Antena Cables, Channels, MR Coils, Plates, MS Beams, Round etc. According to the Revenue, these items were used for erection and civil work and had no direct or indirect relation with manufacture of the final product. The adjudicating authority, vide its order dated 23-2-2005, disallowed the said Modvat credit, imposing penalty of the like amount and directing interest to be paid. 6. The learned Counsel appearing for the appellant, in all these appeals, contended that, the Appellate Commissioner did not consider the uses to which these items were put. He submitted that, these items were used for the machinery, which was utilized for manufacture of sugar and, therefore, they should be treated as parts, components or accessories of the machinery of the sugar factory. He also submitted that, even though the appellant had taken up a stand that these were capital goods or parts, accessories or components thereof, they should be considered to be eligible for Cenvat credit as inp....
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....p; CCE. Meerut-II v. M/s. DSM Sugar, Final Order No. 360/06-SM, dated 4-1-2006. He also relied upon the Circular of the Central Board of Excise & Customs (CBEC) No. 276/110/96-TRU, dated 2-12-1996; Departmental Clarification published in 2000 (117) E.L.T. T-37; and Notification No. 67/95-CE, dated 16-3-1995, in support of his contentions. 7. The learned authorised representative for the Department submitted that, it was amply proved from the record that, none of the items can be considered to be 'Capital Goods'. He submitted that, since the claim was made in respect of these items as 'Capital Goods', Modvat credit cannot be allowed on the ground that they were inputs. In support of the reasoning of the Appellate Commissioner that Modvat credit was inadmissible in respect of welding electrodes, he relied upon the following decisions : (i) Jaypee Rewa Plant v. Commissioner of Central Excise, Raipur, 2003 (159) E.L.T. 553 (T-LB); (ii) Triveni Engg. & Industries Ltd. v. CCE, Meerut, 2005 (186) E.L.T. 158 (T-LB); (iii) J.K. Cement Works v. Commissioner of Central Excise, Jaipur, 2007 (211) E.L.T. 235 (T) = 2....
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....a Plant v. Commissioner of Central Excise, Raipur (supra), and in the case of Triveni Engg. & Industries Ltd. v. CCE, Meerut (supra), no Modvat/Cenvat credit was admissible in respect thereof on the ground that they were capital goods or parts/components/accessories thereof. 8.1 The reliance placed by the learned Counsel on the Head Note of Kisan Co-operative Sugar Factory Ltd. v. Commissioner of Central Excise, Meerut-I (supra), is misconceived, because the Head Note is wrong and says something which is totally opposite to what has been stated in the body of the judgment in paragraph 5. It is, therefore, essential to set out both, the Head Note as well as paragraph 5 of the judgment from which it is purported to have been culled out. The Head Note of the said report reads as under : "Cenvat/Modvat - Capital goods/inputs - When in substance credit is admissible either on ground that goods are eligible capital goods or are used as eligible inputs, mere wrong mention of head under which they are claimed should not make any difference, if and when the entitlement to it is otherwise established under law - Rules 2(a) and 3 of Cenvat Credit Rules, 2004. [para 5]" The parag....
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....13, that the goods, which were claimed as inputs, cannot get Modvat credit as 'Capital Goods'. This pronouncement is binding and no contrary view can be taken. 8.1 The Division Bench of this Tribunal, in the case of Commissioner of Central Excise, Noida v. DSM Ltd. (supra) [appellant's own case], allowed the appeal of the Revenue by holding that, the Modvat credit under Rule 57Q was not available to welding electrodes during the period of dispute in this case. Even as regards structural items, such as, M.S. Steel etc., the finding that the goods were of general nature and used for fabrication of steel structures and cannot be treated as 'Capital Goods', was upheld by referring to the decision of the Hon'ble Supreme Court in the case of CCE v. Jawahar Mills Ltd. (supra). It was held that, the subject items were used for fabrication of steel plates, sheets etc. and could not be treated as parts/components/accessories of any machine for the purpose of Modvat credit under Rule 57Q. In another case decided against the appellant by the Tribunal in the case of DSM Sugar Mills Ltd. v. CCE, Kanpur, reported in 2001 (135) E.L.T. 654 (T-Del), the Division Bench observed that, with reg....