TMI Blog2010 (8) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... . - This appeal is by the Revenue challenging, the order passed by the Tribunal [2005 (195) E.L.T. 316 (Tribunal)] holding that the assessee is eligible for credit in terms of the definition of capital goods covered under Chapter 85. 2. The assessee M/s. Madras Cements Ltd., Mathod, are the manufacturers of O.P. cement falling under Chapter 2502.00 of Central Excise Tariff Act, 1985 (hereinafter referred to as 'the Act' for short). On gathering intelligence that the assessee has taken CENVAT credit on ineligible items, the preventive unit of Davangere Division visited the unit on 14-2-2002 and verified the CENVAT documents. During such verification, it was observed that the assessee has taken CENVAT credit on electric bulbs and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... theirs, adequate lighting is a pre-requirement and the cement plant as a whole includes, mechanical, electromechanical and electrical equipment, apparatus etc., and bulbs which are integral part to electrical system have to be construed as an accessory and hence, CENVAT is allowed to be taken on bulbs in terms of Rule 2(b)(ii) of the Rules. They further contend that the tariff classification is irrelevant and all components, spares and accessories are eligible for CENVAT credit as long as they are used in the factory for the manufacture of final product. It is further contended that, in so far as the rubber strips are concerned, again they are used in their plant to ensure safety against electric shocks. The strips are used wherever open a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are meant for lighting purpose only. When credit can be allowed for small gas filled bulbs falling under Chapter 85.39, why not for lamps and light fittings falling under Chapter No. 91.05 when both are used in the same factory on production lines and therefore, it upheld that contention of the assessee that the electric lights falling under Chapter 94.05 should be construed as 'Capital Goods' covered under Rule 2(b)(ii) of CENVAT Credit Rules as accessories to electric system. Therefore, it held that, both electric bulbs and rubber strips are eligible capital goods and CENVAT credit can be extended to them. Thus, it set aside the order of the adjudicating authority by allowing the appeal and granted the relief to the assessee. 4. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provision of Rule 2(b)(ii) of the CENVAT Credit Rules, 2001 and wrongly availed the CENVAT credit reserves the entry after being warned by the Internal Audit Party but before issuance of Show Cause Notice, is liable to pay penalty under Rule 13 of the CENVAT Credit Rules, 2001?" We have heard the learned advocates appearing on both sides and perused the records. 6. Chapter 85 deals with electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles. The Notes to the said Chapter sets out what are the items which are not covered under the said Chapter. It is not in dispute that the electric bulb is not one such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e like; prefabricated buildings. The Notes to the said Chapter sets out what are not covered in the said Chapter. Note 1(f) says, lamps arid lighting fittings of Chapter 85 do not fall within Chapter 94. What falls within Chapter 94 is clearly mentioned at Chapter 94.05, which reads as under : "Chapter 94.05 : Lamps and lighting fittings including searchlights and spotlights and parts thereof, not elsewhere specified or included; illuminated signs, illuminated name-plates and the like, having a permanently fixed light source, and parts thereof not elsewhere specified or included." 8. Therefore, it is clear from the aforesaid descriptions that the lamp and light fittings which are not illuminated with the help of electricity falls ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16, it has been held as under : "Para-16 : The next item is lighting fittings where the duty involved is Rs. 1,63,274. The claim made in their respect is that in the absence of illumination, the work could not go on. This is a fat-fetched argument. In the discussion earlier, we had held that an item or equipment even with remote association with production or process would qualify but an electrical lighting fittings would not meet that requirement. We uphold, the rejection of this claim by the Addl. Commissioner." 11. The aforesaid observation of the Tribunal runs counter to the law declared by the Apex Court in the case of J.K. Cotton Spg. Wvg. Mills Co. Ltd. v. Sales Tax Officer, Kanpur [1997 (91) E.L.T. 34 (S.C.)], wherein t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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