2004 (97) ECC 343 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

South Zonal Bench -- Chennai

Shri Jeet Ram Kait, Member (T)

Maris Spinners Ltd.

Versus

CCE, Trichy

Appeal No. E/891/2003/Md

[Arising out of Order-in-Appeal No. 329/2003 (SCN) -- TRY-II dated 29.7.2003 passed by the Commissioner of Central Excise (Appeals) Trichy]

Final Order No. 464/2004, dt. 30.4.2004, Certified on 14.6.2004

Modvat credit on inputs

Lighting, fitting & parts falling u/h. No. 94.05 for manufacturing Cotton Yarn falling under heading No. 52.05 of CETA, 1985 -- Credit cannot be denied if the normal conditions prevalent in the industry, production of the finished goods would be difficult without the use of electrical equipments hence the equipment should be regarded as intended for use in the manufacture of the goods -- Rule 57Q of CE Rules.

PRESENT :

Shri R. Masilamoney, Con. for the appellant.

Smt. Bhagyadevi, SDR for the respondent.

Cases Cited :

1. CCE Coimbatore v. Jawahar Mills, 2001 (77) ECC 1 (SC).................................. [Para 5]

2. JK Cotton Spg. & Wvg. Mills Co. Ltd., 1997 (91) ELT 34 (SC)...................... [Paras 3, 5]

Per : Jeet Ram Kait (Oral)

This appeal filed by the M/s Maris Spinners Ltd. the appellants herein is directed against Order-in-Appeal No. 329/2003 (SCN)-TRY-II dated 29.7.2003 passed by the Commissioner of Central Excise (Appeals) Trichy, by which the Commissioner has held that the goods viz. Lighting Fittings and parts thereof, falling under heading 94.05 of CETA, 1985 is not eligible to Modvat Credit.

2. The brief facts of the case are that the appellants herein are engaged in the manufacture of Cotton Yarn falling under heading No. 52.05 of the CETA, 1985. They have availed Modvat Credit on the goods `Lighting Fittings and parts thereof' falling under heading No. 94.05 to the extent of Rs. 47,994 under Rule 57Q of the CE Rules, 1944. They have filed necessary declaration under Rule 57T on 23.2.96. The capital goods credit was sought to be disallowed on the ground that the goods are ineligible capital goods under Rule 57Q. The original authority allowed the credit holding inter alia that the goods were industrial in nature and hence eligible for credit. Aggrieved by the said order, the Revenue moved the Commissioner (Appeals) who under the impugned order held in favour of the Revenue. Aggrieved by the said order, the assessee-appellants have come in appeal.

3. Shri R. Masilamoney, learned Consultant for the appellants submitted that the goods involved are capital goods for industrial use having several pieces mounted with mirror optic and illumination system to cover the entire installed area of the machinery of the appellants and are eligible for the benefit of Modvat Credit under Rule 57Q. The goods were used inside the manufacturing hall and are not used in the office attached to the mills and the light fittings are quite essential for production of the goods and without such magnifying industrial lighting system, it would be very difficult to carry on the manufacture of the final products. He has also invited my attention to the judgment of the Hon'ble Apex Court in the case of JK Cotton Spg. & Wvg. Mills, 1997 (91) ELT 34 (SC).

4. Smt Bhagyadevi, learned SDR appearing for the Revenue defended the impugned order and submitted that as rightly held by the lower appellate authority, the impugned goods were not eligible under the general categories like plant and machinery etc. since they were not used in producing or processing of any goods or for bringing about any change in any substance for the manufacture of the final product as required under the Rules. She further submitted that since the lighting Fittings involved in the present case, have not participated in the production of final products in the appellants' factory, they are not eligible for the benefit of Modvat Credit under Rule 57Q.

5. I have considered the rival submissions and gone through the case records and perused the case law cited by the party. In the instant case, the goods in respect of which benefit of Modvat Credit under Rule 57Q is claimed, are `Lighting Fittings and parts thereof. The contention of the appellants are that the impugned goods are installed in the manufacturing hall of the factory and those fittings are essential for the manufacture of their final product. I observe that the Hon'ble Supreme Court in the case of JK Cotton Spinning and Weaving Mills Co. Ltd., 1997 (91) ELT 34 (SC) has held that if having regard to the normal conditions prevalent in the industry, production of the finished goods, would be difficult without the use of electrical equipment, the equipment should be regarded as intended for use in the manufacture of goods. Further the Hon'ble Supreme Court in the case of CCE Coimbatore v. Jawahar Mills, 2001 (77) ECC 1 (SC) : 2001 (132) ELT 3 (SC) has held that power cables and capacitors, control panels, cables distribution boards, switches and starters, air compressors and electric wires, cables would qualify for benefit as capital goods under Rule 57Q. Following the ratio of the judgments of the Hon'ble Apex Court as noted above, I am of the considered opinion that the impugned goods are eligible for benefit of Modvat Credit under Rule 57Q. Thus, the impugned order is not legal and proper. Accordingly, I set aside the impugned order and I allow the appeal with consequential relief, if any.

6. The operative portion of the order allowing the appeal of the party was pronounced in the open Court on 30.4.2004.

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