2003 (9) TMI 480 - AT - Central Excise

Summary

Issues: Revenue's appeal against the credit allowed on transformers as part of plant and machinery under Rule 57Q.

Analysis:
1. The Revenue challenged the credit allowed on transformers by the Commissioner (Appeals) under Rule 57Q, arguing that transformers are not part of plant and machinery used in production or processing of goods.

2. The Revenue contended that the word 'plant' in Rule 57Q should be limited to items specified in the rule and that transformers, being used to regulate electricity supply, do not qualify as part of the plant involved in production or processing activities.

3. The Revenue cited a Tribunal decision regarding transformers received before a specific date, arguing that such transformers were not considered capital goods, thus questioning the eligibility of transformers for credit.

4. The Tribunal considered the submissions made by the Respondent in writing, as they could not attend the hearing, and proceeded to decide the issue.

5. The Tribunal noted that the eligibility issue under Rule 57Q had been settled by the Supreme Court in a previous case, emphasizing that the user of the item determines its qualification as per the rule, not the Revenue.

6. It was established that transformers bring about a change in electric supply, and their use is determined by the manufacturer, making them eligible for credit under Rule 57Q.

7. The Tribunal referenced a case where transformers were deemed eligible goods, and previous Tribunal decisions denying credit on transformers were no longer valid in light of the law laid down by the Supreme Court.

8. The Tribunal rejected the Revenue's argument regarding the limited application of the word 'plant,' citing a specific case to support its decision.

9. Transformers received before the amendment of Rule 57Q were considered eligible for credit based on previous judgments, further weakening the Revenue's appeal.

10. The Tribunal dismissed the Revenue's reliance on certain cases, emphasizing that those precedents were not applicable in the current context.

11. Based on the detailed analysis and findings, the Tribunal concluded that there were no valid grounds to entertain the Revenue's appeal, and therefore, the appeal was rejected.