TMI Blog2007 (1) TMI 96X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible for modvat credit as a capital good - 9/2005 - - - Dated:- 2-1-2007 - Rajesh Balia and Chatra Ram Jat, JJ. [Order]. - 1. Heard learned counsel for the parties. 2. The following substantial question of law has been raised for decision in this appeal by the revenue:- "Whether the asbestos gasket sheets used by the assessee-respondent for connecting various equipments through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bestos gasket sheets are being used for connecting various equipments through which the process of gas and steam passes and are, therefore, necessary accessories of the principal plant for manufacture of gas and steam and are eligible for availing modvat credit in terms of Clause (ii) of Rule 2 of Cenvat Credit Rules, 2001. 5. The adjudicating authority after show cause notice issued to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h it is an accessory that is to say direct involvement in the primary functioning of machine is not the necessary requirement of capital goods to be eligible for modvat credit if it falls within clauses (b), (c) or (d) of Explanation 1. It may be assumed that for the purpose of clause (a) such machines which are primarily involved in manufacturing are included in the capital goods but if we come t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal, it is apparent that asbestos gasket sheets are used for the passage of gas and steam manufactured in the assessee's plant. Apparently, the user is essential and adjunct to the main plant and must fall in the same domain of accessories necessary for smooth running of the plant. Consequently, applying the ratio laid down in aforesaid two decisions, this appeal must fail, affirming the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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