TMI Blog2008 (6) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... sed that the items for which the benefits are being claimed for has rightly been arrived at to be covered under the capital goods. Therefore, in view of the above analysis, the question of law referred to above is dealt with accordingly in favour of the respondent. - 5 of 2000 - - - Dated:- 24-6-2008 - R.B. Misra and Sanjay Karol, JJ. [Order per : R.B. Misra, J. (Oral)]. - Heard Mr. Sandeep Sharma, learned Assistant Solicitor General of India for the petitioner. Heard Mr. Rahul Mahajan, learned counsel for the respondent. 2. The present Central Excise Reference has been preferred under Section 35H(1) read with Rule 218 of Central Excise Act, 1944 (hereinafter referred to as the Act) in reference to order dated 20-9-1999 of Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Rule 57Q of the Central Excise Rules, 1944 (in short called Rules). They were served with a show cause notice dated 12-1-1996 for having claimed the modvat credit on certain goods illegally as the same did not fall within the definition of 'capital goods'. They were called upon to show cause as to why the credit of Rs. 6,79,867.40 be not disallowed and recovered from them under Rule 57U of the Rules read with Section 11-A of the Act. The penal action under Rule 173Q was also proposed to be taken and for that also, they were called upon to show cause. 4. The respondents contested the said show cause notice by alleging that the goods on which they have claimed modvat credit fall within the definition of 'capital goods' and the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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' 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 machi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Learned counsel for the Union of India, however, while dealing with the decision of Supreme Court in Commissioner of Central Excise, Coimbatore and others v. Jawahar Mills Ltd. and others - 2001(132) E.L.T. 3 (S.C.) = (2001) 6 SCC 274 has fairly submitted that the Supreme Court has indicated that the language used in explanation to Rule 57Q of Rules is said to be liberal and the Supreme Court in Jawahar Mills case (supra) has very categorically indicated that the items brought under capital goods would depend upon its user. However, learned counsel for the petitioner has very emphatically submitted that in the explanation clause of capital goods indicated in Rule 57Q the items indicated in explanation 1(a), 1(b) and 1(c) are very speci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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