2008 (8) TMI 39

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....red as CESTAT) in Excise Appeal No. 3504 & 4096 of 2004-NB(S), whereby the appeal of the assessee (present respondent) is allowed (except for laboratory equipment), and one that of the Revenue, is dismissed. 2. The question of law involved in this appeal is as under: "Whether, Modvat credit can be allowed on the items, namely 'M.S. Angle', 'Cement' and 'Bitumen', which are used as construction material, under Rule 57Q of the Central Excise Rules, 1944? 3. Heard learned counsel for the parties. 4. Brief facts of the case are that respondent M/s. India Glycols Ltd., Kashipur (hereinafter referred as Unit) is engaged in manufacture of Monoethylene Glycol. Diethylene Glycol, Triethylene Glycol, Polyethylene Glycol and heavy Glycol, ....

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....de order dated 6-3-1997, disallowed Modvat credit on Inert and Spring, Ceramics Fibres, Enklo-N. 68, Lab Equipment, Cement, Bitumen, M.S. Angle and other items on the ground that these items do not form part of the capital goods or part of the plant and machinery. Thereafter, the assessee filed further appeal before the CESTAT, New Delhi, which set aside order dated 6-3-1997, vide order dated 16-12-1997, and remanded back the matter to the Commissioner (Appeals) for de novo decision. The Commissioner (Appeals), thereafter, decided the matter vide order dated 13-4-2004, allowing the Modvat credit to the Unit on Cement, Bitumen and M.S. Angle, Indicator and flow meter under Rule 57Q, and upheld the remaining part of the order of the Assistant....

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....e aforesaid definition was amended vide Notification No. 11/1995 Central Excise (N.T.) dated 16th March 1995, whereby clause (d) and Clause (e) were added to the Explanation. Clause (d) and Clause (e) added in Explanation to Rule 57Q, read as under:   "(d) Following goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and used in the factory of the manufacturer.   (i) All goods falling under heading Nos. 84.02, 84.05, 84.06, 84.11, 84.12, 84.16, 84.17, 84.19, 84.21, 84.23, 84.25 to 84,28, 84.80, 85.05, 85.35, 90.11, 90.12, 90.13, 90.16, 90.17 and 90.24 to 90.31; (ii) Auxiliary plants falling under heading No. 84.04 for use with boilers of heading No. 84.02; (iii) I.C. engines (othe....

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....be used in the factory for the production of the final product. We agree with the argument advanced on behalf of the respondent only to the extent that the requirement for claiming Modvat credit in respect of an item under Rule 57Q read with Section 3 of Customs and Tariff Act, 1985, in view of the language used in the Explanation (1) to said Rule, is that such items must have been used for the manufacture of the final product. We also agree that the meaning of expressions 'in the manufacture' and 'for the manufacture' are different. The expression 'in the manufacture' while refers to the items used in manufacturing of the final product, the expression 'for the manufacture' covers the other items which may not be necessarily part of the new....