1999 (6) TMI 140 - AT - Central Excise

Summary

Issues:
Eligibility of capital goods credit on various items including Electrostatic Precipitator, Conveyor Belt for coal, Chain Hoist equipments, Electric wires and cables, Auto Manual Station, Pin & spare of pins, Booster, and CPU 100 Module.

Analysis:

1. Electrostatic Precipitator:
The Tribunal found that the Electrostatic Precipitator is essential pollution control equipment installed with the coal-fired boiler for steam generation in paper manufacturing. Citing previous rulings, it was determined that such equipment qualifies as machinery used in the production process, making it eligible for capital goods credit.

2. Conveyor Belt for coal and pay loader of coal:
The Tribunal recognized the Conveyor Belt as material handling equipment for coal transportation to the boiler. Referring to Tribunal decisions, it was established that material handling equipment falls under the definition of capital goods, allowing for capital goods credit.

3. Chain Hoist equipments and Chains:
The Chain Hoist equipments and Chains were deemed necessary for coal feeding, paper loading, and shifting operations. As material handling equipment, they were considered eligible for capital goods credit based on their role in the manufacturing process.

4. Electric wires and cables:
The usage of Electric wires and cables for electricity transmission within the facility was justified for capital goods credit, following a precedent set by a Larger Bench decision. The Tribunal upheld their eligibility based on the established legal interpretation.

5. Auto Manual Station:
The Auto Manual Station, controlling water level in the boiler, was deemed crucial for safe boiler operation and consequently for the manufacturing process. It was classified as a capital good under the relevant Rule explanation, making it eligible for credit.

6. Pin & spare of pins:
The Pins and spare parts were considered integral to the coal loader equipment, falling under the same category as the equipment itself. As such, they were covered by the explanation to the Rule, making them eligible for capital goods credit.

7. Booster:
The Booster, being a component of pollution control equipment, was recognized as part of a category eligible for capital goods credit. The Tribunal's previous ruling on pollution control equipment supported the eligibility of the Booster for credit under the Rule explanation.

8. CPU 100 Module:
The CPU 100 Module, a component of the soot blower used for boiler cleaning, was deemed essential for enhancing boiler efficiency in the production process. As a part of the soot blower, it was considered a capital good under the Rule explanation, thus qualifying for capital goods credit.

In conclusion, the Tribunal upheld the eligibility of capital goods credit on all eight disputed items, rejecting the Revenue's appeal and affirming the decision of the Commissioner of Central Excise (Appeals), Ghaziabad.