CCE Vs. MADRAS CEMENTS LTD.

JUDGEMENT

(1.) The revenue is contending that the Modvat credit allowed in respect of the following goods are required to be reversed as they are used within the mines and not in the factory. The capital goods are air conditioner motor, dumper spares, hydraulic excavator, drilling machine, claw coupling gyros meter, pressure guage and spares for break drum.

(2.) We have heard both sides in the matter and perused both the orders. We find from the Commissioner (Appeals) order, the finding noted from the Dy Commissioner's order with regard to the use of the air conditioner motor. The appellants have contended that it is used exclusively for cooling ESP panel room where slip power electronic systems are being kept. The Commissioner noted that the item is used as part of air conditioner plants to maintain temperature in the process of manufacture of products and held it to be eligible for modvat credit. He has relied on the ratio of the judgment of the Tribunal rendered in the case of CCE v. Tablets India Ltd. 2001 (138) ELT 1436 (Tri -Chennai). We find from the grounds of appeal that the revenue is not contesting this findings of Commissioner (Appeals) more particularly with regard to the use of the item as a part of air conditioning plant in the process of manufacture of cement products. Therefore, the order of the Commissioner (Appeals) granting modvat credit with regard to air conditioner motor is upheld and the claim of the department that it is used in the mines is rejected. Insofar as other items are concerned., the matter is covered in favour of revenue in the case of Madras Cements Ltd., v. CCE Hyderabad 2003 (56) RLT 978 : 2003 (109) ECR 401 (T -LB). As the items noted supra other than air conditioner motor are used as capital goods in mines situated outside the factory, hence they are not eligible for the benefit of Modvat credit and therefore the order of the Commissioner (Appeals) insofar as these items are concerned are set aside by allowing the revenue's claim. The impugned order is modified accordingly. The appeals are partly allowed.