TMI Blog2008 (8) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... , Standing Counsel, for the Petitioner. S/Shri Rajesh Kumar and S. K. Posti, Advocates, for the Respondent. [Order per : Prafulla C. Pant, J. (Oral)]. - This appeal, preferred under Section 35-G of the Central Excise Act, 1944, is directed against the order dated 29th of May 2006, passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (hereinafter referred as CESTAT) in Excise Appeal No. 3504 4096 of 2004-NB(S), whereby the appeal of the assessee (present respondent) is allowed (except for laboratory equipment), and one that of the Revenue, is dismissed. 2. The question of law involved in this appeal is as under: "Whether, Modvat credit can be allowed on the items, namely 'M.S. Angle', ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nut and Bolts. However, Modvat credit amounting to Rs. 4,58,687.01 was disallowed under Rule 57-1 of the aforesaid Rules. Also, similar credit of Rs. 4,18,768.96 was disallowed under Rule 57-U of the rules read with Section 11A of Central Excise Act, 1944. Aggrieved by said order, the Unit preferred an appeal before the Commissioner (Appeals), Customs and Central Excise, Ghaziabad. Said authority vide order dated 6-3-1997, disallowed Modvat credit on Inert and Spring, Ceramics Fibres, Enklo-N. 68, Lab Equipment, Cement, Bitumen, M.S. Angle and other items on the ground that these items do not form part of the capital goods or part of the plant and machinery. Thereafter, the assessee filed further appeal before the CESTAT, New Delhi, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products; (b) components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose; and (c) moulds and dies, generating sets and weighbridges used in the factory of the manufacturer." The aforesaid definition was amended vide Notification No. 11/1995 Central Excise (N.T.) dated 16th March 1995, whereby clause (d) and Clause (e) were added to the Explanation. Clause (d) and Clause (e) added in Explanation to Rule 57Q, read as under: "(d) Following goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise, Coimbatore v. Jawahar Mills Ltd., 2001 (132) E.L.T. 3 (S.C.), and argued that the language used in the Explanation (1) to Rule 57Q was very liberal and Clause (d) and Clause (e) added w.e.f. 16-3-1995, were explanatory one and do not dilute the items mentioned in Clause (a) of Explanation (1) and only requirement in respect of items for which Modvat credit is claimed must be used in the factory for the production of the final product. We agree with the argument advanced on behalf of the respondent only to the extent that the requirement for claiming Modvat credit in respect of an item under Rule 57Q read with Section 3 of Customs and Tariff Act, 1985, in view of the language used in the Explanation (1) to said Rule, is that such i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Cement and Bitumen with regard to which Modvat credit is claimed were used in fixing the plant or machinery for the purposes of manufacturing the aforesaid items. Therefore, we find that the CESTAT has erred in law in holding that the Unit is entitled to Modvat credit on the items Cement and Bitumen under the Head of 'capital goods'. However, as far as M.S. Angles are concerned, the adjudicating authority as well as the lower appellate authority has observed that M.S. Angle were used by the Unit in joining the connecting M.S. pipes in manufacturing the goods produced by the Unit. As such, in respect of 'M.S. Angle', the CESTAT has rightly upheld Modvat credit, allowed to the Unit. 8. For the reasons as discussed above, we hold ..... X X X X Extracts X X X X X X X X Extracts X X X X
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