C.C.E., INDORE Vs. GRASIM INDUSTRIES LTD.

JUDGEMENT

(1.) THE respondents are manufacturers of Sodium Hydroxiode (Caustic Soda) Hye/Flackes/solid, liquid cholorine, Hydrochloric Acid etc. falling under various headings of chapter 28. They availed modvat credit under Rule 57Q of the Central Excise Rules totally amounting to to Rs.319/ - on the item "4 Wire Temperature Transmitters". The Add1. Commissioner of Central Excise, Bhopal vide his Order dt. 12.3.97 disallowed the modvat credit on this item to them on the ground that it is used as an instrument to convert temperature singles into mini volts and transfer it to the control panel. Its usage does not have any direct role in the manufacture from production of excisable goods though it is being used by the assessee in relation to the manufacture of their final products. He accordingly, disallowed them the modvat credit on this item.

(2.) ON appeal, the Commissioner (Appeals) allowed the appeal of the party.

(3.) THE Revenue are in appeal against the above order of Commissioner (Appeals). I have heard Shri M.D. Singh, SDR for the appellants. The respondents are not represented. It is observed that the original authority in his order has admitted that the item under consideration is being used by the assessee in relationg to the manufacture of their final products albeit it does not have any direct role in the manufacture or production of excisable goods. The definition of capital goods under Rule 57Q at the relevant time provided that for the purpose of availing the modvat credit under Rule 57Q the 'Capital goods' should be used for producing one processing of final products. It is no where provide that they should have direct relation to the manufacture of such products. Therefore, the appeal os the Department is mis -conceived and the same is accordingly, rejected.