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TMI Blog2014 (10) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... October 1996 to December 1996, it was noticed that they have taken credit of duty in RG 23C Part II on goods such as pumps, iron and steel, motor, cables, electrical appliances etc., 2. According to the Jurisdictional Superintendent, the goods referred above do not either bring about any change in the material used in the manufacture of final product or are used for processing of excisable finished product. As such the credit taken on the goods as "capital goods" is in contravention of the provisions of Rule 57Q and hence are liable to be expunged under the relevant provisions. 3. Consequently, a show cause notice was issued on 10.04.1997. Reply was submitted on 22.4.97 along with Explanation that the capital goods are used in the manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are eligible for modvat credit under rule 57Q. The above said decision was followed by the Hon'ble Tribunal, Chennai in the case of EIP Parry (I) Ltd., Vs CCE, Trichy reported in 2002 (150) ELT 765 (Tri. Che) wherein it was held that Acetaldehyde Tank, Condensate Tank and FRP Tank, required for storing intermediate products and processed material, are eligible for modvat credit as capital goods. By applying the ratio of the above decisions of the Hon'ble Tribunal, I hold that MS Tank is eligible for modvat credit. 7. Against which, the Department went on appeal before the Tribunal and contended that MS Tanks (Heading No.73.09 of the CETA Schedule) were brought within the scope of "capital goods" for Modvat purpose only with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of modvat credit available during the period October 1996 to December 1996. 12. Further reliance was placed on the larger Bench decision of the Tribunal on which there appears to be no dispute. The Tribunal held that the law prevailing during the period of dispute permitted Modvat credit on plant and machinery etc. used for manufacture of final products vide Clause (a) of Explanation 1 to Rule 57Q and rejected the appeal. Aggrieved against the same, the Revenue has preferred the present appeal. 13. On admission of the appeal, the following substantial questions of law were formulated: (a) Whether the Hon'ble Tribunal is right in allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Tri. Mum) and EID Parry (I) Ltd vs CCE, Trichy reported in 2002 (150) ELT 765 (Tri.Che), wherein it was held that MS Tank is eligible for modvat credit as it is a capital goods and therefore entitled to the benefit of Rule 57Q. 16. We find that this finding, on fact, read with Explanation 1 to Rule 57Q get clearly attracts the goods in question. By no stretch of imagination one can deny that MS Tank used in the manufacturing process is not a plant, machinery, apparatus, equipment etc., Similar issue was considered by our Bench of this Court in C.M.A.No.1265 of 2014 dated 10.07.2014, wherein, this court has held as follows: 5. The Tribunal considered the conten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess Cement Manufacturing Plant, which falls under Chapter 84, as mentioned in Serial No.(i) of Rules 2(a)(A). Thus, the items in question are covered in serial No.(iii) of Rules 2(a)(A) of the Rules, CBEC has clarified that all parts, components, accessories which are to be used with capital goods in serial (i) and (ii) of Rules 2(a)(A) and classifiable under any chapter heading are eligible for availment of CENVAT credit. A plain reading of serial (iii) cannot lead to a different conclusion either. 8. After considering the use of the goods in question, in our considered view, the present case is covered by the decision of the Hon'ble Madras High Court in appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls on behalf of the Department that the goods in respect of which the MODVAT credit was availed by the appellant were not capital goods as per the provisions of Rule 57-Q of the Rules. It was also submitted that such goods were not used in the factory premises of the appellant in any manufacturing process and therefore, the said goods were not capital goods as claimed by the appellant. It was also the case of the Department that the said goods had been exported by the appellant along with parts of machinery manufactured by the appellant in a container and the said parts i.e. the parts purchased by the appellant had been exported in the same condition i.e. even without opening the packages or testing them. Thus, the role of the appellant was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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