TMI Blog2001 (11) TMI 92X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed Modvat credit of Rs. 30,320/- in respect of excise duty paid on voltage regulators used by him in his factory premises as an equipment, which regulate the voltage of electricity flow to the machines used in the manufacture of textiles by the assessee in order to protect the machine from any damage which may occur due to fluctuation in the voltage. The Assessing Officer found that the equipment has nothing to do with the manufacture of final product as it is neither a machine used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product. 4.The Commissioner of Customs (Appeals) accepted the contention of the assessee by upholding the ground raised by the assessee that voltage stabilizer is essential for stabilizing the flow of electricity for the proper functioning and maintenance of the machines to achieve a regular and proper production of the final product, as the power fluctuations is bound to cause damage to the machines. The voltage regulator is one of the essential equipment with the machine to run the machine properly. With this finding, the appeal was allowed. The order passed by the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) by a hundred per cent export-oriented undertaking or by a unit in an Electronic Hardware Technology Park and used for the manufacture of final products in any place in India, shall be restricted to the extent of duty which is equal to the additional duty leviable on like goods under Section 3 of the Customs Tariff Act, 1975 (51 of 1975) equivalent to the duty of excise paid on such capital goods. Explanation. - For the purposes of this section, - (1) "capital goods" (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 the factory of the manufacturer. (2) "specified duty" means duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975). Notwithstanding anything(2) contained in sub-rule (1), no credit of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be machines, machinery, plant, equipment, apparatus, tools or appliances. Any of these goods if used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product would be 'capital goods', and, therefore, qualify for availing Modvat credit. Per clause (b), the components, spare parts and accessories of the goods mentioned in clause (a) used for the purposes enumerated therein would also be 'Capital goods' and qualify for Modvat credit entitlement. Clause (c) makes moulds and dies, generating sets and weigh-bridges used in the factory of the manufacturer as capital goods and thus qualify for availing Modvat credit. The goods enumerated in clause (c) need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer. Thus, it can be seen that the language used in the explanation is very liberal." The Supreme Court has further said "they had no difficulty in accepting the contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the machines described in clause (a) nor is confined to spare parts for the machines used for the purpose described in clause (a) but also includes 'accessories' to the said machine. The word 'accessories' has not been defined to give any specific meaning for the purposes of the Act nor it has a technical meaning. In these circumstances, if the dictionary meaning or the meaning assigned to the word 'accessory' in the absence of the definition in relation to the machines is concerned, it become more than obvious without any doubt about the same that the 'accessories' of a machine denotes something extra which is added to help in a secondary way and which contributes in the functioning of a machine in a subordinate degree though it is not essential or necessary part of it. 19.Black's Law Dictionary in its 5th edition defines the expression "accessory" as anything which is joined to another thing as an ornament or to render it more perfect or which accompanies it, or is connected with it as an incident or as subordinate to it or which belongs to or with it as an adjunct or accompaniment. 20.It further says that 'a thing of subordinate importance aiding or contributing in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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