TMI Blog2014 (10) TMI 722X X X X Extracts X X X X X X X X Extracts X X X X ..... pital goods of Sl. Nos.1 to 4 of the table annexed to Rule 57-Q of the Rules. It is quite evident that the goods received by the appellant was used for construction of a platform which are used by mechanics for checking the running of the machines or used for supporting the equipments. Goods used by the appellant was for manufacture of a platform, which was used for raising a civil structure and by no stretch of imagination, could it be considered as a sugar mill machinery or a plant or component, spares or accessories classifiable under Chapter Heading 84. We are of the opinion, that these items cannot be specified as capital goods under Rule 57-Q of the Rules and, consequently, we hold that the appellant had wrongly availed the credit - Decided against assessee. - Central Excise Appeal No. 234 of 2005 - - - Dated:- 17-10-2014 - Hon'ble Tarun Agarwala And Hon'ble Dr. Satish Chandra,JJ. ORDER (Per: Tarun Agarwala,J.) The appellant is a unit of M/s Daya Engineering (Sleeper) Ltd. Naya Bans, Gagalheri, District Saharanpur and is engaged in the manufacture of sugar and molasses falling under Chapter sub-heading No.1701.31, 1701.39 and 1703.10 of the Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Appeal before the Customs Excise and Service Appellate Tribunal. The Tribunal by its order dated 25.7.2005 allowed the appeal of the Department holding that the appellant was not entitled to avail MODVAT credit. The appellant, being aggrieved by the order of the Tribunal, has filed the present Appeal under Section 35-G of the Central Excise Act. We have heard Sri Nikhil Agarwal along with Sri Parv Agarwal, the learned counsel for the appellant and Sri B.K.S.Raghuvanshi, the learned counsel for the Department. The learned counsel contended, that the goods received by the appellant, namely, plates, sections, sheets, steel castings, staging material, checkered plates etc. were capital goods and would come under the term plants and machinery and, consequently, the appellant was entitled to avail MODVAT credit under the erstwhile Rule 57-Q of the Rules. In support of his submission the learned counsel placed reliance upon a decision of the Supreme Court in Commissioner of Central Excise, Jaipur vs. Rajasthan Spinning Weaving Mills Ltd., 2010(255) ELT 481 as well as a decision of the Supreme Court in Commissioner of Central Excise, Coimbatore and others vs. Jawahar Mills Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppliers had opted a modus operandi to get the benefit of MODVAT by way of classifying the items under Chapter 72, 73 into items of 84, in view of the fact, that the items covered under Chapter 72 or 73 are not covered under the purview of MODVAT scheme. In the light of the contention raised by the learned counsel for the parties, it is necessary to consider the provision of Rule 57-Q of the Rules as it existed then at the relevant moment of time under the Central Excise Rules, 1944. For facility, the said provision is extracted under under: 57Q. Applicability. - (1) The provisions of this section shall apply to goods (hereafter in this section, referred to as the final products ) described in column (3) of the Table given below and to the goods (hereafter, in this section, referred to as capital goods ), described in the corresponding entry in column (2) of the said Table, used in the factory of the manufacturer of final products. TABLE Sl. No. Description of capital goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and used in the factory of the manufacturer Description of final prod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and pipes and fittings thereof, used in the factory; 9 Pollution control equipment; 10 Grinding wheels and the like goods falling under sub-heading No.6801.10; 11 Goods falling under heading No.68.02; and 12 Lubricating oils, greases, cutting oils and coolants. (2)(i) The manufacturer of the final products shall be allowed credit of the duty of excise or the additional duty leviable under section 3 of the Customs Tariff Act, 1975 (5 of 1975) (hereinafter referred to as specified duty ) paid on the capital goods. (ii) The manufacturer availing of the credit may utilise the same for payment of duty of excise payable on the final products manufactured in his factory. (3) Notwithstanding anything contained in sub-rule (1), the manufacturer of the final products shall be allowed credit of additional duty leviable under section 3 of the Customs Tariff Act, 1975 (51 of 1975) on goods falling under Chapter heading No.98.01 of the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods specified as capital goods have been given in the table annexed to Rule 57-Q of the Rules. Therefore, the benefit of credit of duty could only be extended to those capital goods, which finds place in the said table. A perusal of the table annexed to Rule 57-Q of the Rules indicates that items falling under Chapters 82, 84, 85 and 90 can also be considered as capital goods irrespective of the fact that the said components, spares or accessories falls in another Chapter Heading and benefit of credit of duty on the same could be extended under Rule 57-Q of the Rules. The invoices reveal that the appellant had purchased checkered plates, packing plates, sheets, sections, staging materials, which were classified by the supplier as items falling under Chapter 84 as sugar mill machinery parts. To be more precise, the description of the items mentioned by the supplier was boiler house internal stagging fabricated parts of plants for sugar milter , fabricated parts for modification of Donnelley Chute , fabricated parts of boiler house , fabricated parts of caustic soda tank . These items are appropriately classifiable either under Chapter 72 as checkered plates, sections, e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re of a platform, which was used for raising a civil structure and by no stretch of imagination, could it be considered as a sugar mill machinery or a plant or component, spares or accessories classifiable under Chapter Heading 84. We are of the opinion, that these items cannot be specified as capital goods under Rule 57-Q of the Rules and, consequently, we hold that the appellant had wrongly availed the credit of ₹ 9,84,066/-. The decision of the Supreme Court in Sarvesh Refractories and Mohan Breweries are not at all applicable. In these decisions, the classification of the item was changed, and in that context, the Court held, that once an item, which had been classified by the manufacturer supplying the material, the said classification cannot be changed by the assessee receiving the goods. In the instant case a specific finding has been given that the supplier of these items had wrongly classified them under Chapter 84 as sugar mills machinery parts, whereas the goods so received by the appellant were used for construction of a platform and were not used anywhere as a part of the machinery. Consequently, the said decisions are not applicable. For the reasons stated ..... 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