TMI Blog2010 (4) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing” final product although such activities are necessary to keep the plant in progress. No infirmity in impugned order which is upheld. Appeal dismissed. - E/5571/2004 - A/217/2010-EX(PB), - Dated:- 30-4-2010 - Justice R.M.S. Khandeparkar, President and Shri Rakesh Kumar, Member (T) REPRESENTED BY: Shri Atul Gupta, Co. Secy. the Appellant. Shri B.L. Soni, SDR, for the Respondent. [Order per: Justice R.M.S. Khandeparkar, President (Oral)]. - Heard the learned Company Secretary for the appellants and the learned DR for the respondent. We have also perused the written submissions filed on behalf of the appellants. 2. The appellants are challenging the order dated 17th August, 2004 passed by the Commissioner (Appeals). 3. The appellants are the manufacturers of Portland Cement classifiable under Chapter sub-heading 2502.29 of the Central Excise Tariff Act, 1985. A show cause notice dated 28th April, 1995 came to be issued to the appellants requiring them to show cause against denial of Modvat credit to the tune of Rs. 41,82,161/- for the period from 1st November, 1994 to 28th February, 1995. According to the Department the said Modvat credit was sought t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at regard in the matter of Jawahar Mills (supra), Commissioner of Central Excise, Indore v. Surya Roshni Ltd. reported in 2001 (128) E.L.T. 293 (T.-LB); Jawahar Mills Ltd. v. Commissioner of Central Excise, Coimba tore, reported in 1999 (108) E.L.T. 47 (T.); and Commissioner of Central Excise, Meerut-II v. India Glycols Ltd., reported in 2008 (230) E.L.T. 39 (Uttarakhand). 5. On the other hand, the Departmental Representative submitted that, merely because the items are used in the repairs and maintenance of the plant, it would not result in use thereof in the process of manufacture of the final products, either directly or indirectly. The Notification No. 11/95 dated 16-3-1995 was not retrospective in nature and could not be applied for the period in question. Reliance is placed in the decision of the Larger Bench of this Tribunal in the matter of Surya Roshni Ltd. (supra) while drawing our attention to para 12 thereof. 6. The impugned order apparently discloses that the authorities below have denied the Modvat credit in relation to the items in question on the ground that they were used not in the process of manufacture of the final product, but the same were used in the proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, - 'Capital goods' means —(1) (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 sub stance for the manufacture of final products: (b) Components, spare parts and accessories of the afore said 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) (2) Notwithstanding anything contained in sub-rule (1), no credit of specified duty paid on capital goods shall be allowed if such duty has been paid on such capital goods before the 1st day of March 1994. ANNEXURE All goods specified in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986), other than the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be included within Rule 13 The expression "in the manufacture" takes in within its compass, all processes which are directly related to the actual production Building materials including lime and cement not required in the manufacture of tiles for sale cannot, however, be regarded within the meaning of Rule 13, as raw materials in the manufactureor processing of goods or even as "plant". It is true that buildings must be constructed for housing the factory in which machinery is installed. Whether a building is a "plant" within the meaning of Rule 13, is a difficult question on which no opinion need be expressed. But to qualify for specification under Section 8(3)(b) goods must be intended for use of the nature mentioned in Rule 13, in the manufacture of goods. Building materials used as raw materials for construction of "plant" cannot be said to be used as plant in the manufacture of goods. The Legislature has contemplated that the goods to qualify under Section 8(3)(b) must be intended for use as raw materials or as plant, or as equipment in the manufacture or processing of goods, and it cannot be said that building materials fall within this description." 10. Considering the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said amended provision and on the contrary. held that, the issue to be decided with reference to the provision of law as it stood during the relevant time. In other words, the point of retrospectivity was indirectly answered in negative. Further, it was held that whether the item was the capital goods or not was required to be decided by referring to clause 1(a) of Rule 57-Q as it stood at the relevant time i.e. prior to the amendment. 14. Larger Bench in Jawahar Mills Ltd. 's case (supra), while considering the meaning of the expression 'used for producing or processing' referred the decision of the Supreme Court in J.K. Cotton Spg. Wvg,, Mills Co. Ltd.'s case (supra) and while observing that, "the said expression was not limited to the ingredients or the commodities used in the process or those directly and actually needed for turning out or the creation of the goods" and further that, "the issue as to whether amendment effected in Notification No. 11/95 and the Notification No. 14/96 was retrospective or not was purely of academic nature and need not be decided", held that, "Wires and cables would be covered by the expression 'plant' being an item necessary for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he absence of any dispute by the Revenue that the goods satisfy the ingredient of the Rule 57Q(1)(a) of the said Rule. It was not a case where capital goods were used in the process of repairs and / or maintenance of the plant or goods which in turn help the process of manufacture of the final product. 16. It is also pertinent to note that the decision in Jawahar Mills' case (supra) by the Apex Court was arrived at after taking note of its earlier decision in Indian Farmers Fertilizers Corporation Ltd. v. Collector of Central Excise, Ahmedabad, reported in 1996 (86) E.L.T. 177 (S.C.), wherein the question was whether ammonia used in the off-site plant was also ammonia which is "used elsewhere in the manufacture of fertilizers". The off-site plants were held to be part of the process of manufacture of urea. Considering the phraseology used in the exemption Notification, it was held that the exemption is not limited to the raw naphtha used for producing when that is utilized directly in the urea plant since the Notification only required the ammonia should be used in the manufacture of fertilizers and not that it should be directly in the manufacture of fertilizer. It was held thus ..... X X X X Extracts X X X X X X X X Extracts X X X X
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