TMI Blog2006 (5) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... ause (a) to Explanation I to Rule 57Q(1) and, therefore, no Modvat credit would be admissible in respect of these goods. The contrary contentions raised by the assessee-appellant cannot therefore be accepted. Switch boards and Panels - Cables - Industrial valves - Digital weight indicator - Preheating cyclone ducts - Calciner and Kiln feed - Surface Miner - HELD THAT:- This Tribunal in GRASIM CEMENT VERSUS COMMISSIONER OF CENTRAL EXCISE, RAIPUR [ 1997 (8) TMI 209 - CEGAT, NEW DELHI] held that Switch boards/panels being devices for regulating electric supply, were accessories in the form of capital goods , essential for proper working of machines and for production of goods and, therefore, Modvat credit was admissible in respect thereof under Rule 57Q of the Rules - Even for Wires and Cables, relying upon the earlier decision in COLLECTOR OF CENTRAL EXCISE, MEERUT VERSUS NOVA UDYOG LTD. [ 1996 (4) TMI 303 - CEGAT, NEW DELHI] , it has been held that they were included in the definition of capital goods under the Explanation to Rule 57Q. Insofar as these items are concerned, it can hardly be disputed that they fall within the meaning of capital goods for the purpose of Mod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ragraph of the impugned order, which were used for RCC foundation for embedding machinery, were used in civil construction work and, therefore, they did not come within the meaning of capital goods , under Rule 57Q of the Central Excise Rules,1944. The assessee also challenges the finding that 1.025 Dumpers and Static road rollers with accessories were being used in the mine and not within the factory of production, for the manufacture of final product, hence credit of duty was not admissible under Rule 57Q and that diesel engine driven welding set was used for maintenance purpose and hence was not capital goods for the purpose of Rule 57Q. 3. The appellant-assessee had proposed to start their new project at Alathiyur for the manufacture of Cement falling under Chapter 25 of the Central Excise Tariff Act, 1985 and declarations were filed under Rule 57T of the Rules with an intention to avail Modvat credit on capital goods. The show-cause notice dated 11-4-1996 came to be issued for rejection of declaration and disallowance of Modvat credit in respect of certain goods on the ground that they were ineligible for claiming Modvat credit, as they did not qualify for it. Since Modvat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cables will be capital goods and, therefore, the assessee was entitled to clear the same and avail Modvat credit in respect thereof. It has been urged by the assessee in these appeals that the word Plant would include not only the machinery and equipment for the production of any goods but also land, building and factory in which the goods are produced or manufactured. The civil work is an integral part of the project so that machines and machinery can be installed at various heights for proper functioning of the plant in the manufacture of cement. According to them, use of cement and steel had nexus with the manufacture of final product namely, cement. Like-wise, steel items were also required for putting up structures, which will hold the machinery in position and whereafter only, erection and installation would be complete. It is stated that the mines of the assessee were situated at Alathiyur factory and were adjacent to the factory as shown in the Registration Certificate and ground plan, by the Central Excise department. The mines were situated within the approved area of the factory and had to be considered as part of the approved factory premises. The assessee has there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e mining area and not in the factory and, therefore, the assessee was not entitled to claim any Modvat credit. She has therefore, submitted that the demands confirmed against the assessees by the authorities below were fully justified. 7. Under Rule 57Q(1), as it operated during the relevant period, provisions were made for the purpose of allowing credit of specified duty-paid on the capital goods used by the manufacturer in his factory and for utilizing the credit so allowed towards the payment of duty of excise leviable on the final products or as the case may be on such capital goods, if such capital goods were permitted to be cleared under Rule 57S subject to the provisions of the Section and the conditions and restrictions as specified by the Central Government. For the purpose of Section 57Q, capital goods was defined and the expression included machines, machinery, plant, equipment, apparatus, tools or appliances for producing or processing of any goods or for bringing up any change in any substance for the manufacture of final products, as per Clause (a) of the Explanation 1, and the goods falling within the Schedule to the Tariff Act and used in the factory of the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so far as these items 1 to 8 and 20 are concerned, in our opinion, the learned Commissioner (Appeals) has rightly held that these cannot be treated as capital goods within the meaning of Clause (a) to Explanation I to Rule 57Q(1) and, therefore, no Modvat credit would be admissible in respect of these goods. The contrary contentions raised by the assessee-appellant cannot therefore be accepted. 9. The assessee claims that, Switch boards and Panels. Cables, Industrial valves, Digital weight indicator, Preheating cyclone ducts, Calciner and Kiln feed, Surface Miner and Micro Generating Sets were items of capital goods which were used for the manufacture of the final product cement. This Tribunal in Grasim Cement v. Commissioner of Central Excise, Raipur reported in 1997 (96) E.L.T. 354 (Tribunal) held that Switch boards/panels being devices for regulating electric supply, were accessories in the form of capital goods , essential for proper working of machines and for production of goods and, therefore, Modvat credit was admissible in respect thereof under Rule 57Q of the Rules. Even for Wires and Cables, relying upon the earlier decision in Collector of Central Excise v. Nova U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... precints thereof wherein or in any part of which excisable goods (other than salt) are manufactured or wherein or in any part of which any manufacturing process connected with the production of the goods is being carried on or is ordinarily carried on. The definition refers to any premises in which the goods are manufactured or any manufacturing process or any process of manufacture of goods is carried out. In the present case, it has been urged that the place in which the mining operations were carried on by the assessee was within the factory premises as per the Certificate of Registration and the ground plan was also raised before the Commissioner (Appeals). Such a contention in the cross-objection, in which the assessee has alleged that mining operations were carried out within the factory premises as a per the Certificate of Registration and the ground plan. The Commissioner (Appeals), however, did not direct himself to this aspect of the matter namely, whether the mining area, was a part of the factory premises as per the ground plan and the Certificate of Registration. The Commissioner (Appeals) had not directed himself to these aspects of the matter because he proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cturing the final product by the assessee is captive mine and a part of the factory premises as urged by the assessee and the capital goods are used in such captive mine, then obviously, the assessee would be entitled to Modvat credit on such capital goods used in the captive mines which constitute one integrated unit together with the cement factory (of the assessee). 13. (i) For the aforegoing reasons, the appeals filed by the Revenue are dismissed except as regards the use of the Surface Miner (item No. 13) in respect of which the Commissioner (Appeals) is hereby directed to consider whether the said capital goods were used in a captive mine of the assessee. (ii) The appeals of the assessee-appellant are partly allowed only in respect of Static Road roller with accessories (item No. 10), Hindustan 1025 dumpers (item No. 18) and Diesel engine driven welding set (item No. 19) and the matter is remanded to the Commissioner (Appeals) to consider whether these capital goods were used in the captive mines of the assessee which constituted one integral unit together with the cement factory of the assessee and whether mining area was a part of the factory premises of the assessee as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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