COMMISSIONER OF CENTRAL EXCISE Vs. SPIC LTD.

JUDGEMENT

(1.) This appeal by revenue is directed against Order -in -Appeal No. 161/98 (M -I) dated 7 -9 -98 by which the ld. Commissioner has allowed the Modvat credit on air -conditioning, air -cooling unit which are used for the control room where controls for all the systems are fixed. The duty involved for the air -conditioning unit is to the extent of Rs. 1,50,000/ -.

(2.) Aggrieved by the above order, revenue has come in appeal on the ground that the air -conditioner is used for the control room where controls for all the systems are fixed and the air -conditioner is not involved in the production or processing for bringing about any change in final products. They further submitted that the air -conditioner is used for circulating cool air to ensure a comfortable room environment and it does not in any way participate in the production or processing of any goods. Revenue relied on the judgment rendered by the Tribunal in the case of CCE, Coimbatore v. Titan Industries Ltd. as reported in 1997 (96) E.L.T. 398 wherein the question of granting of credit was examined by the Hon'ble Southern Regional Bench, Madras and the Tribunal observed that the Modvat credit was not allowable to air -conditioner as they did not fall under the definition of Rule 57Q. They therefore submitted that the ratio of the above judgment rendered by the Tribunal is squarely applicable to the facts of this case.

(3.) DR Shri P. Devaladu has reiterated the ground mentioned in the appeal memorandum and has submitted that the portion of the Order -in -Appeal No. 161/98 (M -I) dated 7 -9 -98 wherein Modvat credit has been allowed on air -conditioning unit may be set aside and the Order -in -Original No. 4/98, dated 29 -1 -98 passed by the Assistant Commissioner of Central Excise, Chennai -B Division, Chennai -I. Commissioner ate be restored. Ld. DR further submitted that the technical observation taken earlier by Shri Ignatius, Adv. that the appeal by revenue is not maintainable inasmuch as their appeals had been settled under KVS Scheme 1998 is not correct in law inasmuch as by enquiry No. 14 of the KVS Scheme, 1998, it has been stated that the departmental appeal involving disputes of duty will be protected. He therefore submitted that the appeal is maintainable.