C.C.E., DELHI Vs. BHIWANI TEXTILES MILLS.

JUDGEMENT

(1.) The respondents manufacture 'Synthetic staple fibre yarn, Acrylic Yarn, Artificial Staple fibre yarn containing synthetic staple fibre and man made fabrics falling under Chapter 55 of the schedule to the Central Excise Tariff act, 1985. they took modvat credit amounting to Rs. 47,672/ - on the items 'speedcon invertor for ring frame and commander - 150 Humidifier" as "capital goods" under Rule 57Q of the Cental Excise Rules, 1944. The first item is an apparatus fixed with the ring frame machine meant for manufacture of yarn and the second item helps in maintaining certain level of humidity to get the yarn of a particular quality. The Asst. Commissioner of Cental Excise, Rohtak vide his Order dt. 12.9.97 denied the modvat credit on these items to the party on the ground that though the humidities helps in maintaining certain level of humidity to get the yarn of a particular quality but that itself does not mean that it would be considered equipment for production, processing or bringing about any change in the substance. Further, it is observed that humidifier is also not covered under the category of components, parts or accessories of the plant and machinery and thus it is not capital goods within the meaning of clause (b) of the Explanation to Rule 57Q of the said rule and hence, not eligible for modvat credit under this Rule. With regard to the speedcon invertor, the Asst. Commissioner in his order has observed that it is not a specified item within the meaning of clause (d) of the Explanation of Rule 57Q, wherein only the transformers of power handling capacity exceeding 75 KVA have been specified as capital goods.

(2.) The party filed an appeal. The Commissioner (Appeals), New Delhi vide his Order dt. 8.12.29 observed that both the items under consideration are capital goods in terms of Rule 57Q.

(3.) The Revenue are in appeal against the Order -in -Appeal. I have heard Shri A.K. Jain, JDR for the appellant and Shri K.K. Anand, Advocate for the respondents. The only point raised in the Revenue appeal is that the items on which the party claimed the credit are not covered under Rule 57Q as capital goods, as these are not used in or in relation to the final product being manufactured by the party. There are no reasons given in the Revenue appeal either butting the findings of the Commissioner (Appeals) in her order or giving the reasons for not accepting the impugned items as capital goods. The ld. Advocate for the respondents on the contrary has relied on the decision of the Hon'ble Madras High Court in the case of M/s. SIV Industries Ltd. vs. C.C.E., Coibatore reported in 2001 (129) E.L.T. 48 (Mad.). In para 29 of this judgement, it is observed as follows: