RANA MAHENDRA PAPER LTD. Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) THE appellants manufacture paper and paper board falling under Chapter 48. They have been disallowed the modvat credit of Rs. 99,750/ - on the capital goods viz. M.S. Plates, PVC Pipes, Steel Pipes and electric control panel under Rule 57Q of Central Excise Rules, 1944, vide order dated 25.7.2001 passed by the Commissioner (Appeals), Chandigarh. The present appeal is against the order of the Commissioner (Appeals). I have heard Shri Joy Kumar, ld. Advocate for the appellants and Shri H.C. Verma, ld. JDR for the respondents. The ld. Counsel for the appellants submits that the M.S. Plates are used for manufacture of cylindrical M.S. Tank for collection of liquid to be used for bleaching of pulp. PVC Pipes and Steel Pipes are used to maintain the flow of various material viz. water, pulp, steam, chemical, etc. to various machines. Electric Control Panels are used to control the supply of electricity to various machinery for controlling their speed. A reliance is placed on the decision of the Tribunal in CCE, Meerut v. DSM Sugar Mills - - : 2001 (132) ELT 250 in which a reference is made to the Final Order No. A/420/98 -NB (S) dated 21.4.1998 in which it is held that whether M.S. Rounds bars, M.S. Plates, H.R. Plates, Shapes and Sections etc. which are used fabrication of capital goods and not used as building material are eligible for the modvat credit under Rule 57Q of Central Excise Rules, 1944. The appellants are also placing a reliance on the decision of the Hon'ble Supreme Court in CCE v. Jawahar Mills Limited - -2001 (132) ELT 03 (SC) : 2001 (97) ECR 541 (SC). The JDR for the respondents is relying on the decision of the Tribunal in the case of Nava Karnataka Steels Limited v. CCE - -2000 (123) ELT 913 (T) : 2000 (93) ECR 50 (T) and in the case of Rosa Sugar Works v. CCE - -1999 (144) ELT 950 (T) : 2000 (91) ECR 418 (T). In both of these decisions, it is held that CTD bars, angles, channels, plain plates, hot rolled plates, joists and HR sheets used for fabrication/structural purposes are not covered by the definition of capital goods. I have considered the submissions made before me by both the sides. Admittedly, in this case, M.S. Plates on which the modvat credit has been availed by the appellants as capital goods are not used as construction material but are used for manufacture of cylindrical M.S. Tank for collection of liquid to be used for bleaching of pulp. The M.S. Tanks in themselves are capital goods under Rule 57Q of Central Excise Rules, 1944. The admissibility of the modvat credit on M.S. Plates is therefore covered by the decision of the Tribunal in DSM Sugar Mills (supra) relied upon by the appellants. As regards other items under consideration, the modvat credit on them is admissible by the judgment of the Apex Court in Jawahar Mills Limited referred to above. Consequently, the appeal must succeed in respect of the items. The impugned order of the Commissioner (Appeals) is therefore set aside and the appeal is allowed.