TMI Blog2006 (1) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... ctory premises of the appellants, and are being used for the manufacture of the excisable goods. As such, going by the definition of the capital goods, the disputed items in question earn the credit irrespective of their not being actually used in the production of the final products. Following the Hon ble Supreme Court [ 2001 (7) TMI 118 - SUPREME COURT] . Though the period before the Supreme Court was different when the definition of capital goods meant differently. However, the said definition underwent a change as already observed by us and the earlier requirement of the various capital goods being used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products was do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants to redeem the same on payment of redemption fine of Rs. 5 lakhs. In addition, personal penalty of Rs. 10,000/- each has been imposed upon the other appellants, who are the Managing Director and Sr. Manager, under the provisions of Rule 209A of Central Excise Rules, 1944. 2. As per the facts on records, the appellants are engaged in the manufacture of medicines falling under Chapter 30 of Schedule to Central Excise Tariff Act, 1985 and were availing the benefit of Modvat credit on the inputs as also on the capital goods used in the manufacture of the said goods. The appellant has a Molecular Medicines Research Laboratory (MMRL) within their licensed factory premises. During the period April to December, 1998, they imported/indigenous l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch Laboratory is situated in the licensed factory premises of the appellants, and are being used for the manufacture of the excisable goods. As such, going by the definition of the capital goods, the disputed items in question earn the credit irrespective of their not being actually used in the production of the final products. 5. We also solicit support from the Bombay Commissionerate Trade Notice No. 40/96, dated 23-6-96 explaining therein that as long as the capital goods are used within the factory of production, the modvat credit would be available. For better appreciation, we reproduce below Para 73.13 and 73.14 of the said Trade Notice. 73.I3 In the case of capital goods modvat credit, the machinery etc. on which the credit can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced. (iii) In the case of capital goods, the scope of capital goods has been extended by specifying a large number of machinery which will qualify for credit under Rule 57Q. In respect of such capital goods, it has been provided that so long these are used in the factory of production, credit will be allowed, without the need to establish as to whether such capital goods are used in the manufacture of finished goods. It may be clarified that any equipment etc. purchased by a manufacturer but not used within the factory will not be admissible for Modvat. For instance R D equipment used by a manufacturer in their laboratory outside the factory will not be eligible for modvat. If however, such laboratory is part of the manufacturer s factory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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