RELIANCE INDUSTRIES LTD. Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THESE appeals arise out of the orders of Commissioner (Appeals) Central Excise. The issue pertains to admissibility of Modvat credit on capital goods. All the appeals are taken up for disposal together as the issue is common. Annexed to this order is a statement giving details of goods involved in each of the four appeals, their tariff classification and the amount of credit involved.

(2.) WE heard the rival contentions. Much case law has developed since the impugned order was passed. By now it is almost settled as to the scope of Rule 57Q under the erstwhile Central Excise Rules, the kind of goods covered under the definition of capital goods and the ones which are not.

(3.) THE goods covered in appeals E/589, 591 and 592 are covered in the various decisions of the Tribunal in favour of the appellants. The Supreme Court in the case of Jawahar Mills Ltd. 2001 (132) E.L.T. 3 (S.C.) held that the language used in the Explanation (1) of the Rule is very liberal. If any of the items enumerated in Explanation 1(a) and l(b) is used for any purpose mentioned therein for the manufacture of final products, it would satisfy the test of capital goods. The Court further held that the goods specified in Explanation l(c) need not be used in the manufacture of final product. The only requirement is that they should be used in the factory of production. Question whether an item falls within the definition of capital goods would depend upon the use it is put to. Further the Tribunal in the following cases namely Reliance Industries Ltd. 2004 (178) E.L.T. 329 (T) : 2004 (63) RLT 545, Pennar Aluminium Co. Ltd. 2003 (57) RLT 724, Sirpur Mills, Simbhaoli Sugar Mills Ltd. 2001 (135) E.L.T. 1239 (T) : 2000 (39) RLT 686, New J. K Cement Works 1999 (113) E.L.T. 428 and Adarsh Industries 2002 (147) E.L.T. 407 (Tribunal) : 2001 (46) RLT 367 has held that the benefit of capital goods cannot be denied on the ground that a particular item is not directly contributing towards production of goods. Nuts and bolts used in the machinery are a few of such examples.