COMMISSIONER OF C. EX. Vs. MAJESTIC AUTO LTD.

JUDGEMENT

(1.) In this appeal, the Revenue has questioned the validity of the impugned order -in -appeal dated 30 -4 -2002 vide which the Commissioner (Appeals) has allowed the Modvat credit of Rs. 2,91/680/ - on aluminium grills and parts/components of air -conditioning system to the respondents for the months of September and October 1995 as capital goods, by reversing the order -in -original of the Assistant Commissioner.

(2.) The respondents are engaged in the manufacture of two wheeled motor vehicles. They claimed Modvat credit of the disputed amount on parts/components of the air -conditioning system and aluminium grills, apart from other items/goods (not the subject matter of the present appeal). On in aluminium grills, they claimed the Modvat credit on the ground that the same had been installed in the paint shop for proper flow of air to ensure good quality painting of the final product, while on the parts/components of air -conditioners on the ground that the air -conditioners maintain temperatures and conditions suitable for running of the machines in the factory. The Assistant Commissioner disallowed the credit on the ground that these goods did not satisfy the definition of the 'capital goods' for having no relation in the manufacture of the final products of the respondents. The Commissioner (Appeals) had reversed this order of the Assistant Commissioner, through the impugned order.

(3.) The learned JDR has contended that the goods in question could not be termed as capital goods eligible for Modvat credit being not used in or in relation to the manufacture of the final product (two wheeled motor vehicles) of the respondents. Therefore, the impugned order of the Commissioner (Appeals) deserves to be set aside. He has relied on two cases of the Tribunal viz. Commissioner of Central Excise v. Fourts (India) Lab. P. Ltd - 1997 (92) E.L.T. 231 and CCE v. Titan Industries Ltd. - 1997 (96) E.L.T. 398 wherein it has been observed that air -conditioners used to provide congenial atmosphere for manufacture of the goods (watches), could not be termed as capital goods.