TMI Blog2024 (3) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... le Supreme Court by the Department which stood decided on 27.07.2001 in the case of COMMISSIONER OF C. EX., COIMBATORE VERSUS JAWAHAR MILLS LTD. [ 2001 (7) TMI 118 - SUPREME COURT] where it was held that The stand of the revenue was not as has been projected now by Mr. Rohtagi. In this view, the question of directing remand of these matters for fresh decision by the Tribunal does not arise. On the facts and circumstances of these cases, therefore, the stand that the items in question are not used for manufacture of final product cannot be accepted for the reasons aforestated. The aforesaid view was further considered by the Hon ble Supreme Court in the case of COMMISSIONER OF CENTRAL EXCISE, JAIPUR VERSUS M/S RAJASTHAN SPINNING WEAVING MILL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal, Bangalore, (for short, CESTAT ). 3. The question of law framed for challenging the impugned order was whether the finding of the CEGAT/CESTAT, applying the ration laid down in the larger bench of CEGAT in the case of M/s. Jawahar Mills was correct, legal and proper, when the goods are specifically excluded from the purview of Capital Goods as defined in Rule 57 Q of Central Excise Rules, 1944? 4. The goods which were in question in the present appeal are measuring and testing instruments, material handling equipments, Diesel Forklift Truck and Air Conditioners. 5. It would be relevant at this juncture to take note of the finding of the Commissioner of Customs and Central Excise (Appeals), while dealing with the appeal fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g process has to take place in air-conditioning atmosphere, which is required as per the parameters of temperature and also for precision measurement up to a tolerance of a few microns, it does not appear to be possible to manufacture the final products without using the Air conditioners. Therefore, the Air conditioners would be eligible for Capital credit as long as they are not utilized at places other than the manufacturing hall . 6. When the said order was subjected to challenge before the CESTAT by the revenue, the CESTAT also affirmed the order of the Commissioner of Customs and Central Excise (Appeals) while rejecting the appeal. The CESTAT further held that the view taken by the Commissioner of Customs and Central Excise (Appeals) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvat credit has been allowed by the Tribunal could not be treated as 'Capital goods' as the manufacturer could not establish that the entire item was used in the manufacture of final product. To illustrate his point, Mr. Rohtagi submitted that part of a cable may go into the machine used by the manufacturer and, thus, may qualify the requirement of clause 1(a) and, at the same time, another part of the cable which is used only for lights and fans would not so qualify. We have no difficulty in accepting the contention of the learned Additional Solicitor General that, under these circumstances, user will determine whether an item qualifies or not the requirement of clause 1(a). However, in the present cases this aspect has no relevanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing of any goods or for bringing about any change in the substance for the manufacture of final product, although this view was expressed in the light of the aforenoted definition of capital goods in the said Rule, which is not there in Rule 57Q, as applicable in the instant case, yet the user test evolved in the judgment, in Jawahar Mills case, which is required to be satisfied to find out whether or not particular goods could be said to be capital goods, would apply on all fours to the facts of the present case. In fact, in para 6 of the said judgment, the Court noted the stand of the learned Additional Solicitor General, appearing for the Revenue, to the effect that the question whether an item falls within the purview of capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X
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