TaxTMI 
TaxTMI 
2024 (3) TMI 1172
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....he Central Excise Act, 1944 assailing the order dated 19.12.2005 passed in E.A.No. 1168 of 2003 by the Customs, Excise & Service Tax Appellate Tribunal, Bangalore, (for short, 'CESTAT'). 3. The question of law framed for challenging the impugned order was whether the finding of the CEGAT/CESTAT, applying the ration laid down in the larger bench of CEGAT in the case of M/s. Jawahar Mills was correct, legal and proper, when the goods are specifically excluded from the purview of Capital Goods as defined in Rule 57 Q of Central Excise Rules, 1944? 4. The goods which were in question in the present appeal are measuring and testing instruments, material handling equipments, Diesel Forklift Truck and Air Conditioners. 5. It would be rele....
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....e, appear to have been used in the process of manufacture, but not in the R & D Lab., they would be eligible for credit under Rule 57 Q. 8. Since the measuring process has to take place in air-conditioning atmosphere, which is required as per the parameters of temperature and also for precision measurement up to a tolerance of a few microns, it does not appear to be possible to manufacture the final products without using the Air conditioners. Therefore, the Air conditioners would be eligible for Capital credit as long as they are not utilized at places other than the manufacturing hall". 6. When the said order was subjected to challenge before the CESTAT by the revenue, the CESTAT also affirmed the order of the Commissioner of ....
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....n whether an item falls within the definition of 'Capital goods' would depend upon the user it is put to. The submission is that parts of the items in respect whereof availing of Modvat credit has been allowed by the Tribunal could not be treated as 'Capital goods' as the manufacturer could not establish that the entire item was used in the manufacture of final product. To illustrate his point, Mr. Rohtagi submitted that part of a cable may go into the machine used by the manufacturer and, thus, may qualify the requirement of clause 1(a) and, at the same time, another part of the cable which is used only for lights and fans would not so qualify. We have no difficulty in accepting the contention of the learned Additional Solicito....
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....5 held as under: "13. Inter alia observing that capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances if any of these goods is used for producing or processing of any goods or for bringing about any change in the substance for the manufacture of final product, although this view was expressed in the light of the aforenoted definition of "capital goods" in the said Rule, which is not there in Rule 57Q, as applicable in the instant case, yet the "user test" evolved in the judgment, in Jawahar Mills case, which is required to be satisfied to find out whether or not particular goods could be said to be capital goods, would apply on all fours to the facts of the present case. In fact, in para 6 of th....