CCE Vs. INDUSTRIAL OXYGEN CO. LTD.

JUDGEMENT

(1.) The respondents manufacture oxygen and the goods falling under sub -heading No. 2804.12. They availed modvat credit totally amounting to Rs. 2.56,146/ - on the oxygen storage tanks as capital goods under Rule 57Q of the Central Excise Rules, 1944. The proceedings were however initiated against them and the Addl. Commissioner of Central Excise, Nagpur passed an order dated 9.8.1995 in which he denied them the modvat credit of aforesaid amount and further imposed a penalty of Rs. 1 lakh on them. The party filed an appeal and the Commissioner (Appeals), Indore vide order dated 7.2.1996 allowed the appeal by setting aside the order passed by the original authority.

(2.) This is a revenue appeal against the impugned order of Commissioner (Appeals). I have heard Shri Hitesh Shah, DR for appellant and Shri J.C. Patel, Advocate for the respondents. The Commissioner (Appeals) in his order has recorded the findings that storage tanks form part of supply system of the final product. Therefore, they have to be considered as eligible items for modvat credit as capital goods as per Rule 57Q. He has also rejected the departmental contention that the respondents availed the modvat credit of Rs. 17,264/ - on the invoice which was not issued in their name. Shri J.C. Patel the learned counsel for the respondents submits that the invoices were in the name of their company. He has also relied on the following decisions in support of his contention: (i) Industrial Oxygen Co. Ltd. v/s. CCE, Pune -II Order No. CI/2605/01 -WZB/2001 dated 29.8.2001 and (ii) Industrial Oxygen Ltd. v/s. CCE, Vadodara Order No. CI/2524 -25/WZAB/2001 dated 23.8.2001. I have considered the submissions made before me. The storage tanks are used for transporting oxygen gas for delivery to the buyers. Without storage tanks, the goods could not be marketed. In this view of the matter, the case of the respondents squarely falls within the definition of the terms 'capital goods' as provided under Rule 57Q. These findings are also supported by the aforementioned decisions relied upon by the respondents, as also the judgment of Hon'ble Supreme Court, in Jawahar Mills Ltd. v/s. CCE -2000 (132) ELT 3 (SC). The impugned order of Commissioner (Appeals) therefore, does not call for any interference. The appeal is dismissed.