TMI Blog1999 (11) TMI 454X X X X Extracts X X X X X X X X Extracts X X X X ..... vi) Electrical Items (vii) Castables (viii) Wire Rope (ix) Bearings (x) Hand Pump (xi) Grease Pump (xii) Supporting Structures, M.S. Angles, Bars, Rods etc. and (xiii) Parts of P.L.C.; (d) that the Department by Show Cause Notice directed them to show cause why the Modvat credit so taken wrongly should not be disallowed and why penalty should not be imposed upon them; (e) that the party in their reply to the SCN contested the Department s allegation that the goods were not capital goods and hence not eligible for the credit under Rule 57Q ibid; (f) that the jurisdictional Asstt. Commissioner of Central Excise adjudicated the dispute allowing Modvat credit in respect of some of the goods and disallowing credit in respect of the remaining goods and also imposing penalty on them under Rule 173Q(1) (bb) of the Central Excise Rules, 1944; (g) that the party, aggrieved by disallowance of Modvat credit in respect of some of the goods [mentioned against Sl. Nos. (i) to (xiii) above], preferred appeals against the Asstt. Commissioner s older before the Commissioner of Customs and Central Excise (Appeals); (h) that the Commissioner (Appeals) passed Order-in-Appeal No. 239 and 240-CE/JPR/UD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... qualify as capital goods under the said rule during the said period. The ld. JDR arguing for the Revenue has relied on the decision of the Tribunal in the case of M/s. J.K. Pharmachem v. CCE [1998 (102) E.L.T. 488 (T)] and submitted that only those material handling equipments which are essential for manufacture of final products would qualify to be capital goods for the purpose of Modvat credit under Rule 57Q and that Loco Spare Parts could not be considered to be essential for the manufacturing process in the factory of the assessee. As regards the modvatability of Wire Rope , the contention of the Revenue is that the lower Appellate Authority has not given his own finding as to the modvatability of this item under Rule 57Q. The Wire Ropes were used for lifting the machinery etc. in the kiln during repair works and therefore were not used in the manufacture of the final products, the Revenue has contended. With regard to parts of P.L.C., it has been pleaded by the Revenue that the said items were used in the Computer which did not have any nexus with the main machine and; for that matter, with the process of manufacture of the final products. Therefore, it is contended, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inter alia that programme logic controller was used for the manufacture of finished products and hence Modvat credit was admissible in respect of the same. 6. On careful examination of the rival submissions made before me and on perusal of the case law cited, I am not in a position to sustain any of the grounds of the Revenue s appeal. On the other hand, I see much force in the submissions made by the ld. Advocate for the Respondents. In the light of the ratio of the decisions cited by the ld. Advocate, including the decision of the Tribunal s Larger Bench in the case of Jawahar Mills Ltd. (supra), I would hold that Loco Spare Parts, Wire Ropes and Parts of P.L.C. would qualify to be capital goods for the purpose of Modvat credit under Rule 57Q of the Central Excise Rules and hence the Revenue s Appeal is only liable to be rejected. It is ordered accordingly. 7. Among the goods in question in the two Appeals filed by the assessee, the challenge against the lower Appellate Authority s order in regard to Hand Pump and Grease Pump is not pressed by the ld. Advocate for the appellants in Appeal No. E/2214/98-NB. In respect of the remaining goods in question in the two Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng process and held that the tubes were integral part and parcel of the machinery installed in the cement plant of the assessee. I am inclined to follow this decision of the Tribunal and hold that the M.S. Tubes in question in the present appeals are capital goods for the purpose of Modvat credit under Rule 57Q. In relation to Hose Assembly , the lower Appellate Authority disallowed Modvat credit on this item on the ground that the item was used in the mining area and not in the factory of the assessee. For this decision, the lower Appellate Authority relied on the decision of the Tribunal in the case of Madras Cements v. CCE [1998 (99) E.L.T. 395 (T) = 1998 (74) ECR 201 (T)]. The ld. Counsel for the appellants has submitted that the reliance placed by the lower Appellate Authority on the Tribunal s decision in the case of Madras Cements is erroneous and has relied on the decision of the Tribunal in the case of Jay Pee Rewa Cements v. CCE, Jaipur [1998 (29) RLT 399 (CEGAT)] to fortify his contention that the Hose Assembly used in the mine adjoining the factory premises of the appellants would fall under the category of capital goods for the purpose of Rule 57Q. Apart from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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