TMI Blog2003 (7) TMI 197X X X X Extracts X X X X X X X X Extracts X X X X ..... w. 3.1 Learned Advocate mentioned that the Commissioner (Appeals) have disallowed the Modvat Credit of the duty paid on the capital goods used in Mines on the ground that the basic principle of extending the Modvat Credit on capital goods is with reference to their use in the factory and that the mines are not part of the factory premises as the approved ground plan of factory premises does not include the mines. He submitted that the mines in the present matters are situated across the road and the factory and mines are divided only by a public road; that, therefore the mines would fall under the category of precincts of the factory and accordingly the items used in the mines would also be eligible for credit; that mining of limestone an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... struction/fabrication work. He submitted that the steel items in question are used as parts of various machineries installed in their factory and as supporting structures to them; that the Appellants have not claimed capital goods credit in respect of the steel material, about 95% of the total steel material purchased by them, which is used for the purpose of building construction; that it is only in respect of balance 5% of the steel materials where the same has been used as supporting structures for the various machineries. Reliance has been placed on the decision in the case of Global Sugar Ltd. v. CCE, Kanpur, 2000 (119) E.L.T. 611 (T). 4.2 Countering the arguments, learned SDR submitted that the steel items have been used as supporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner (Appeals) has denied the Modvat Credit on Railway Tracks materials; that the Railway Track materials are used for carrying limestone, coal and cement from their factory of production of cement; that the activity is integrally connected one having direct relation to the manufacture of cement; that these goods should be treated as plant or machinery handling raw materials and the final products; that without use of these Railway Tracks material, manufacture of cement is hardly possible. He relied upon the decision in the case of CCE, Guntur v. KCP Limited, 2002 (149) E.L.T. 689 (T) = 2002 (48) R.L.T. 959 (T) wherein the portable truck loading unit used for transporting sugar from godown to loading point and from there to the vehicle wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Track material does not fall within definition of capital goods as given in Explanation 1(a) to Rule 57Q. Railway track material is neither machine, machinery, plant, equipment, apparatus, tools or appliances which is used for producing or processing of any goods or for bringing about any change in any substance. Applying the ratio of the Supreme Court judgment in the case of Jawahar Mills Limited supra, Railway Track materials cannot be considered to be capital goods at all. The Tribunal has also expressed the similar views in the case of Jayaswals Neco Limited. The learned SDR has rightly pointed out that the decision of the Karnataka High Court in the case cited by the learned Advocate was considering the Income-tax Act provisions for in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he learned Advocate mentioned that the Commissioner (Appeals) has also disallowed the Modvat Credit in respect of Drilling machines/Welding machines and Lubricants used in workshop for general maintenance purpose on the ground that these cannot be considered items integrally connected with the manufacturing process of cement. The learned Advocate submitted that the workshop in a cement factory is an essential facility which provide for carrying out routine repairs so that the manufacturing process is carried out in a smooth way and any obstruction caused by any machine or machinery item needs to be removed only by the items in question used in the workshop. He relied upon the decision of the Tribunal in the case of Jawahar Mills Limited v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned Advocate that these Telecommunication equipments are capital goods within the meaning of capital goods as given in Explanation to Rule 57Q. As explained by him these are used within the factory for monitoring the functioning of the machines. It is thus apparent that these are used for the purpose of telecommunication and accordingly cannot be regarded as machine, machinery, equipment, apparatus, etc. which are used for producing or processing any goods for bringing about any change in any substance for the manufacture of final products. We, therefore, hold that the Modvat Credit is not available in respect of Telecommunication equipments. 9.1 Finally learned Advocate submitted that there is quantification error inasmuch as an a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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