JAWAHAR MILLS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE above appeals have been referred to this Larger Bench vide separate reference orders. In all the cases, the issue involved is eligibility or otherwise to the benefit of Modvat credit in terms of Rule 57Q of the Central Excise Rules.

(2.) THE stand of the revenue is that the items in dispute namely welding electrodes, wires and cables etc. are not capital goods within the meaning of the explanation to Rule 57Q which covers goods used only in production, processing or bringing about any change in substance for manufacture of the final product and that the goods in question are not such goods. The Revenue is also of the view that the amendment in Rule 57Q which was made on 16 -3 -1995 is prospective and not retrospective in operation.

(3.) IN the case of Jawahar Mills Ltd., Modvat credit has been denied on power cables and capacitors; the period of dispute is March 1994 to October 1994. This case has been referred to the Larger Bench by Misc. Order No. 52/98, dated 27 -1 -1998 1998 (100) E.L.T. 41 (Tribunal), in view of the conflicting views expressed in the Tribunal's order - Modvat credit had been extended on wires and cables in the cases of Century Cement Ltd. v. Collector of Central Excise - 1997 (95) E.L.T. 655, Grasim Cement v. Collector of Central Excise - 1997 (96) E.L.T. 354 and other cases while in the case of SIV Industries by Final Order No. 646/96 dated 16 -4 -1996, the Tribunal had held that wires and cables used for transmission of electricity would not be eligible to the benefit of Modvat credit as they are not eligible to capital goods in terms of Rule 57Q.