TMI Blog2014 (11) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 11-9-2014 - Ms. Archana Wadhwa and Shri Rakesh Kumar, JJ. For the Appellant : Ms. Sukriti Das, Advocate For the Respondent : Shri M.S. Negi, Authorized Representative (DR) JUDGEMENT Per. Rakesh Kumar :- The facts leading to this appeal are, in brief, as under. 1.1 The appellant are manufacturers of cement chargeable to Central Excise duty. They availed Modvat credit of Central Excise duty paid on inputs and capital goods used in or in relation to manufacture of their final products. The period of dispute in this case is from 1st November 1994 to 28th February 1995. During this period, the definition of capital goods as given Rule 57Q of the Central Excise Rules, 1944 was as under :- Capital goods means - (a) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products ; (b) Components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose ; and (c) moulds and dies, generating sets and weigh bridges used in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt were not covered by the definition of capital goods. The original Adjudicating Authority vide order dated 28/05/01 confirmed the demand to the tune of ₹ 41,81,811/- alongwith interest and imposed penalty of ₹ 50,000/-. On appeal being filed to Commissioner (Appeals), the Commissioner (Appeals) vide order-in-appeal dated 17/08/04 partly allowed the appeal but upheld a part of the demand. The Modvat credit demand upheld was in respect of items which were used for cutting, repairing, installation and maintenance of the plant and machinery and also in respect of certain items of capital goods, which were brought within the purview of the term capital goods by adding clause (d) and (e) to the definition of capital goods in Rule 57Q by Notification No. 11/1995-CE (NT) dated 16/03/95. It is against this order that the present appeal has been filed. The items which according to Department was covered by the tariff headings which had been brought specifically within the definition of capital goods w.e.f. 16/03/95 are why the at C special, fire crete, air compressors, spare parts for compressors, air cylinders, spare impeller, grate bar, great plate, Fork lifter truck and lift ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as such, she is not contesting the question of Cenvat credit in respect of other items where the denial of Cenvat credit had been upheld by the Commissioner (Appeals), that in view of Larger Bench judgment of the Tribunal in the case of CCE, Indore vs. Surya Roshni Ltd. (supra), the above 10 items even though the same were brought specifically within the definition of capital goods by adding clause (d) and (e) w.e.f. 16/03/95 would be eligible for Modvat credit for the period of dispute also, that the Tribunal in its final order dated 30th April, 2010 has wrongly held that amending Notification No. 11/95-CE dated 16/03/95 is not retrospective, as this notification in view of the Tribunal s judgment in the case of CCE, Indore vs. Surya Roshni Ltd. (supra) has to be applied retrospectively and that in view of the above, the impugned order upholding the denial of Modvat credit in respect of the 10 items mentioned above, is not correct. 3. Shri M.S. Negi, learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and held that there is no mistake in the Tribunal s final order dated 30th April 2010, that the Larger Bench judgment in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14.80 are used in cement mill, spare parts for compressors falling under sub-heading 8414.99 is used in cement mill, air cylinders and spare impeller falling under sub-heading 8414.90 are also used in cement mill, grate bar and great plate falling under sub-heading 8416 are used for clinker grinding in the cement mill, Fork lifter trucks falling under sub-heading 8427 are used for transport of material within the cement plant and lifting chain falling under sub-heading 8428 is used in the lift for moving the material. The Commissioner (Appeals) had upheld the denial of Modvat credit in respect of these items on the ground that the same are not covered by clause (a), (b) and (c) of the definition of capital goods in Rule 57Q (1) and that though these items according to the appellant are covered by clause (d) and (e) introduced w.e.f. 16/03/95, and since the newly introduced clause (d) and (e) introduced w.e.f. 16/03/95 cannot be given retrospective effect, Modvat credit in respect of these items cannot be allowed. The appellants contention is that in terms of Larger Bench judgment of the Tribunal in the case of CCE, Indore vs. Surya Roshini Ltd. reported in 2001 (128) E.L.T. 293 (T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rstly, the item should be a machine, machinery, plant, equipment, apparatus, tool or appliance. Secondly, it should be used for producing or processing of any goods or for bringing about any change in any substance for manufacture of the final product. There is no quarrel with this proposition. The question is - what is the true meaning of the two stage expression employed. 38. It has been contended by the Revenue that in terms of Explanation 1(a), the item must have a direct nexus with the final product being produced. This contention is contrary to the decision of the Supreme Court in the Indian Copper Corporation case and J.K. Cotton Spg. Wvg. Mills Co. Pvt. Ltd. case cited supra. 39. The matter may be considered in the light of the above. Wires and cables would be covered by the expression `plant being an item necessary for the assessee to carry on his business and being an item not in the nature of a consumable, but an item having fairly high degree of durability. It therefore, satisfies the definition of plant. 40. Similarly, the other items involved in these cases namely control panels, cables, welding electrodes, etc. will also qualify as capital goods under Rul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be rectified. In view of this, we hold that the 10 items, in question, would be eligible for Modvat credit. Moreover, looking to their function it is seen that these items are used either as refractory in the liming of kiln shell or as component part of the cement mill for grinding the clinker or as part of forklift trucks for movement of material within the factory or as part of lift for lifting of the material within the factory and all these goods in view of the judgment of the Apex court in the case of Jawahar Mills Ltd. (supra) would be eligible for capital goods Modvat credit as they have nexus direct or indirect with the manufacture of final product. We, therefore, hold that the impugned order passed by the Commissioner (Appeals) denying capital goods Modvat credit in respect of the above 10 items is not sustainable. The same is set aside. As regards the denial of Modvat credit in respect of other items, since the same has not been challenged, we are not going into the question of admissibility or otherwise of Modvat credit in respect of those items. The appeal stand disposed of, as above. (Pronounced in open court on 11/09/2014.) - - TaxTMI - TMITax - Central ..... X X X X Extracts X X X X X X X X Extracts X X X X
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