SPIC LIMITED Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS appeal is against the Order -in -Appeal No. 172/98, dated 28 -9 -1998 passed by the Commissioner (Appeals) wherein the Or -der -in -Original No. 3/98, dated 29 -1 -1998 was upheld. The said Order -in -Original had confirmed duty demand of Rs. 3651.00 on rubber sheets falling under Heading 4008/29 as Modvat credit thereon had been denied, on the ground that rubber sheets could not be considered as components or spare parts of any capital goods.

(2.) HEARD Shri S. Sekhar, Sr. Manager assisted by Shri R. Lakshminarayanan, Sernior Assistant for the appellants who submitted a written submission on the issue which enclosed also a certificate from their Chief Manager (Mechanical) who submitted that these are not ordinary rubber sheets but are rubber sheet gaskets used as components in their ten equipments in the manufacturing plants. It is also certified that without using these rubber sheet gaskets as components in their 10 equipments caustic soda could not be manufactured. Shri Sekhar also submits that the gaskets used on these equipments are cost effective and instead of purchasing the cut to size rubber gaskets they cut the gaskets to the size and dimension which vary from item to item. He submits that the rubber sheets had been purchased and were used from time to time in the maintenance of Plant after cutting them to size. In this connection he submits that similar issue was considered in the decision of the Tribunal in the case of Synthetics and Chemicals Ltd. v. C.C.E., Kanpur as reported in 1997 (89) E.L.T. 793 wherein LDPE black lay flat tubing used as lining material of internal surfaces of tanks has been held to be component and spare for plant and equipment, was allowed the benefit of Modvat Credit under Rule 57Q of the Central Excise Rules, 1944, even though they have been used for lining of the internal surface of tanks after cutting to the size required. He submits that the principles involved in this case is also similar as in their case only the item received was required to be cut to size which could be used for the maintenance of Plant. Therefore, they submit that the benefit is available in their case.

(3.) HEARD Shri S. Sankaravadivelu, learned DR who submits that since what was received was not gaskets cut to size, therefore these were not component of plants and equipments which would not qualify as eligible for Modvat credit under Rule 57Q. He further submits that both the Or -der -in -Original and the Order -in -Appeal impugned are speaking orders which gave reasoned decisions.