TaxTMI 
TaxTMI 
2004 (10) TMI 160
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Welding Electrodes on the ground that Welding Electrodes are not covered in the definition of capital goods. A penalty was also imposed on the appellants. The Asstt. Commissioner, Central Excise, Rampur disallowed the credit of Rs. 33,136.59 on Welding Electrodes and imposed an equal amount of penalty on the appellants. On appeal, the Commissioner (Appeals), Meerut-II upheld the order of the Asstt. Commissioner denying the credit but reduced the penalty to Rs. 15,000/-. He pleaded that Welding Electrodes are eligible for Cenvat credit as components of the appellants plant & machinery and are covered under Rule 57AA of the Central Excise Rules, 1944. He stated that components are used only as spare parts. He relied on the Board's Circular No. 276/10/96-CX., dated 2-12-96 wherein it was clarified that all parts, components, accessories which are to be used with capital goods, classifiable under any Chapter Heading are eligible for availment of Modvat credit. He relied on the following decisions :- (i) Jawahar Mills Ltd. v. CCE [1999 (108) E.L.T. 47 (LB)] (ii) CCE v. Jawahar Mills Ltd. [2001 (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3]. (iv) Jaypee Rewa Plant v. CCE [2003 (159) E.L.T. 553]. 3. It was pleaded by Shri Kapil Vaish, ld. C.A. that in J.P. Rewa Mills case (supra), credit on Welding Electrodes was denied only on taking it as input and no decision was given for their use as capital goods. Therefore, this case is not applicable and the case of Surya Roshini (supra) does not deal with spares, components and accessories. Appeal No. E/82/04-NB(SM) : 4. In this case, credit was denied to the appellants on Welding Electrodes and winding wires under Rule 57Q/57AA on the ground that these are not specified capital goods and the wires are used in the repairing of Motors and Static Converters. 5. Shri Bipin Garg, Advocate appearing for the appellants pleaded that the Modvat credit on Winding Wires is available to them and he relied on the Tribunal's decision in case of CCE, Chandigarh v. Arihant Spinning Mill [2002 (147) E.L.T. 1181] which was upheld by the Supreme Court as reported in [2003 (151) E.L.T. A178]. Regarding Welding Electrodes, he reiterated the submissions already made by Shri Kapil Vaish in the above said appeal. 6. Shri V. Valte, SDR on behalf of the Revenue pleaded....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e manufacturer Description of final products (1) (2) (3) 1. All goods falling under heading Nos. 82.02 to 82.11; All goods specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the following, namely :- (i) all goods falling under Chapter 24; and (ii) all goods falling under head­ing Nos. 36.05 or 37.06. (iii) ingots and billets of non-alloy steel falling under sub­heading Nos. 7206.90 and 7207.90, manufactured in an in­duction furnace unit, whether or not any other goods are produced in such induction fur­nace, and hot re-rolled products of non-alloy steel falling under sub-heading Nos. 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90 on which duty is paid under sec­tion 3A of the Central Excise Act, 1944 (1 of 1944). 2. All goods falling under chapter 84 (other than internal combustion engines falling under heading No. 84.07 or 84.08 and of a kind used in motor vehicles, compressors falling under heading No. 84.14 and of a kind used in refrigerating and airconditioning appliances and machinery, heading or sub-heading Nos. 84.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t or appliances used in an office." 12. On reading the Table below the Rule 57Q(1) and definition of capital goods as given under Rule 57AA during the relevant period, it is clear that the goods falling under Chapter 83 were not specified capital goods on which credit was available. Welding Electrodes fall under Heading No. 83.11 and this is not specified as eligible heading for taking credit as capital goods. The appellants have relied on the decision of the Larger Bench of the Tribunal in the case of Jawahar Mills Ltd. v. CCE, Coimbatore [1999 (108) E.L.T. 47 (Tribunal)], the Supreme Court's decision in the case of CCE, Coimbatore v. Jawahar Mills Ltd. [2001 (132) E.L.T. 3 (S.C.)] and Tribunal's decision in case of Maihar Cement v. CCE (supra) for allowing credit on Welding Electrodes. I find that the Larger Bench of the Tribunal and the Supreme Court allowed the Modvat credit on Welding Electrodes on the basis of the definition of capital goods at the relevant time, which was much wider. At that time capital goods included (i) machine, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in ....