TaxTMI 
TaxTMI 
2000 (8) TMI 227
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....the definition of Capital Goods under Rule 57Q(1) of Central Excise Rules, 1944. On adjudication, the Commissioner of Central Excise held that specially designed Chlorine Cylinders fitted with mechanical devices being durable and returnable, were Capital Goods covered by the definition of Rule 57Q. Accordingly, he vacated the show cause notice. Revenue is aggrieved with the above decision of the Commissioner and has challenged same. 2. We have heard Shri J.M. Kennedy, learned JDR for the Revenue and Shri R.N. Bajoria, learned Senior Advocate along with Shri M. Lahiri, learned Advocate. 3. The Commissioner has observed in the impugned Order as under :- "The main issue to be decided is whether the Modvat credit is admissible on Chlorine Cy....
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....al part of the continuous process of manufacture and the specially designed cylinders perform very vital function of providing commercial existence to liquified Chlorine. In this context, I find support from the Supreme Court's decision in the case of Collector v. Eastend Paper Ind. Ltd. - 1989 (4) SC-244, wherein it has been held that 'anything required to make goods marketable must form part of manufacture'. Further, it is held, 'as manufacture includes each and every process incidental or ancillary to the completion of the manufacture of the product so as to put the same into market as a marketable commodity at the factory gate and articles required in that process would fall within the expression in the manufacture of goods.' I find th....
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..../handled/ transported/ sold without pressure vessels/cylinders. These are to be considered as part of the plant and equipment/appliances used for producing or processing of the final product. I, therefore, find that the Chlorine cylinders are covered within the ambit of definition of capital goods as given under Rule 57Q(1) and are eligible for Modvat credit. Held accordingly." 2. As against the above, the Revenue in their Memo of Appeal has contended that Chlorine Cylinders are not being utilised for producing or processing of any goods or for bringing about any change in any substance for manufacture of the final product. The same are being used for storage and transferring the gas in liquid form from the place of manufacturing to the pl....