2007 (11) TMI 96 - HC - Central Excise

In SC s view in another cases lighting fitting & cables would qualify for benefit as capital goods u/r 57Q as production is impossible without use of them tribunal decision in instant case in favor of assessee does not need to be interfered revenue s appeal dismissed

Summary

Issues:
1. Interpretation of eligibility of capital goods for availing Modvat credit under Rule 57Q of erstwhile Central Excise Rules, 1944.
2. Construing the fiscal language in Rule 57Q of erstwhile Central Excise Rules, 1944 strictly.

Issue 1:
The case involved a dispute regarding the eligibility of "lighting fittings and parts thereof" for Modvat credit under Rule 57Q of the Central Excise Rules, 1944. The respondent, engaged in the manufacture of cotton yarn, availed Modvat credit on these goods. The revenue contended that the goods were ineligible capital goods under Rule 57Q. The original authority allowed the credit, considering the goods industrial in nature. The Commissioner (Appeals) ruled in favor of the revenue, leading to an appeal before the Customs, Excise and Service Tax Appellate Tribunal. The Tribunal, following Supreme Court decisions, allowed the appeal, considering the goods as capital goods. The High Court upheld the Tribunal's decision, citing the Supreme Court's interpretation that certain electrical equipment, including lighting fittings, qualified as capital goods under Rule 57Q.

Issue 2:
The High Court analyzed the interpretation of Rule 57Q in light of the Supreme Court's rulings. Referring to the case of Commissioner of Central Excise v. Jawahar Mills Limited, where the Supreme Court included various electrical equipment as capital goods under Rule 57Q, the High Court concluded that "lighting fittings and cables" fell within the ambit of capital goods. Based on this precedent, the High Court dismissed the appeal, upholding the Tribunal's decision in favor of the assessee. The Court found no illegality or irregularity in the Tribunal's order and answered the questions of law against the revenue, leading to the dismissal of the appeal and connected C.M.P.

This detailed analysis of the judgment highlights the key legal issues, interpretations, and precedents considered by the High Court in reaching its decision.