COMMISSIONER OF CENTRAL EXCISE, GUNTUR Vs. JOCIL LTD.

JUDGEMENT

(1.) THE Revenue is aggrieved with the OIA No. 77/2003 -C.E., dated 31 -12 -2003 wherein the Commissioner (Appeals), after due examination of the facts, has noted that the items like PLTS Plain Plates/MS Plates, Expansion Bellows and Brake shoe have all been used in fabrication of Capital Goods such as boiler shells, etc. The plates were cut to sizes and were welded for replacing corroded parts of the Capital Goods. The plates were also used as flanges in the pipelines. These pipelines were connected to various equipment for transferring water, raw material, oils, fatty acids, etc. Therefore, the tubes and pipes and fittings thereof would fall within the category of Capital Goods as having become part and parcel of the same. He has noted that the Expansion Bellows were used in the fabrication of Heat Exchanger. The Expansion Bellows were welded to the outer shell of heat exchangers installed in distillations, hydrogenation and soap plants. Therefore, he held that they have become part of Capital Goods and have a nexus with the manufacturing of final products. He has relied on the ruling rendered by the Tribunal in the case of J.K. Cement Works v. C.C.E., Jaipur - 2000 (116) E.L.T. 52 (Tri.). He has further applied the ratio of the Apex Court judgment rendered in the case of C.C.E., Coimbatore v. Jawahar Mills Ltd. - 2001 (132) E.L.T. 3 (S.C.) wherein the test of Capital Goods had been laid down inasmuch if the item is used in the factory of production in or in relation to the manufacture of final goods then the credit is required to be accepted.

(2.) I have heard the learned SDR. He submits that these items cannot be considered as part and parcel of the Capital Goods and that they were merely used for maintenance of machinery and that they cannot be considered as Capital Goods.

(3.) THE respondents are not present. I have gone through the entire records and find that the Commissioner (Appeals) has examined the facts in detail. The items have not been used for maintenance but they have been used for replacing corroded parts of Capital Goods. They have become part and parcel of the Capital Goods which are used in the manufacture of final product. Therefore, the Commissioner (Appeals), on examination of the facts, has found that the items are not used for maintenance but for replacement of corroded parts of the Capital Goods. Therefore, reliance by the Commissioner (Appeals) on the noted judgments is correct and the same is clearly applicable in the facts of the present case. There is no merit in this appeal and the same is rejected.