RAJ CEMENT Vs. CCE

JUDGEMENT

(1.) The appellants are manufacturers of clinker and cement falling under Chapter 25 of the Central Excise Tariff Schedule. The appeal is against the denial, by the lower appellate authority, of modvat credit amounting to Rs. 1046,335 taken by the appellants during January to April 1998 under Rule 57 -Q of the erstwhile Central Excise Rules, 1944. Barring an amount of Rs. 2901, the entire credit was denied on the ground that the goods in respect of which the credit was taken were not eligible capital goods under Rule 57 -Q. The credit of Rs. 2901 was denied on the ground that the same was taken on the strength of invalid documents. The break -up of the credit in question is given below:

(2.) Heard both the sides. The learned Counsel for the appellants submitted that the credit taken on hand tools was admissible to the appellants as the hand tools, which were used for setting and controlling the various machinery in their factory, were covered by the definition of "capital goods'" under Rule 57 -Q. ACSR was used for transmitting power supply to belt conveyor which was used for transferring limestone from crusher to the factory and, therefore, modvat credit was admissible for the ACSR under Rule 57 -Q. The Programmable Logic Controller (PLC), which was installed in the Central Control Room of the factory, regulated the operation of various machines and was, therefore, integral part of the plant. The item was, therefore, an eligible capital goods under Rule 57 -Q. The Counsel, in this connection, relied on the Tribunal's decision in the cases of Isobars Ltd. v. CCE, 2000 (122) ELT 253 and CCE Jaipur v. JK Cement, 2000 (125) ELT 480. The Iron and Steel items had been used for 132 kV switchyard, back filter ESP and belt conveyor system, which were machineries used in the factory. The said items should be treated as component parts of the said machineries and modvat credit under Rule 57 -Q was liable to be allowed in respect of those items. In this connection, the learned Counsel relied on a number of decisions cited below:

(3.) The learned DR sought to defend the order of the Commissioner (Appeals) on the strength of the findings recorded therein. In respect of Programmable Logic Controller, he submitted that the item was covered under Central Excise Tariff heading 8537, which had stood excluded from the category of eligible capital goods during the material period. He relied on the Board Circular /Order No. 49/3/97 -CX dated 9.5.97 (File No. 154/8/94 -CX.4). In respect of iron and steel items, the DR submitted that the said items had been used for erection and installation of various machineries in the appellants, factory and such items were not eligible capital goods under Rule 57 -Q. He relied on the Tribunal's decision in Max G.B. Ltd v. CCE, Chandigarh, 2002 (53) RLT 922.