2005 (6) TMI 435 - AT - Central Excise

Summary

Issues: Revenue's challenge to eligibility for capital goods credit under Rule 57Q of the Central Excise Rules for specific items.

In the judgment, the Revenue contested the Commissioner (Appeals) decision, arguing against the eligibility of the respondents for capital goods credit under Rule 57Q of the Central Excise Rules for items like Decofoam, Air Handling Unit, Dust Collector, and Liquid Chiller. The Tribunal examined each item individually. Decofoam and Air Handling Unit were deemed capital goods as they maintained a dust-free environment necessary for manufacturing final products, aligning with a precedent set in Mahindra & Mahindra Ltd. v. CCE, Aurangabad. The Dust Collector was also considered essential for reducing dust in the manufacturing area, crucial for producing color picture tubes. Regarding the Liquid Chiller, it was found to be a vital component for maintaining process area conditions by producing chilled water, utilized in various processes. The Revenue's objection was based on a previous Tribunal ruling regarding Humidification Plant and Air Conditioners, which they argued were not eligible for credit due to lacking a nexus for changing the substance of goods. Additionally, the Revenue argued that the Liquid Chillers received before 23-7-96 were not entitled to credit under Rule 57Q 2(ii)(i). However, the Tribunal dismissed these objections, citing a Larger Bench decision in Jawahar Mills Ltd. v. Commissioner of Central Excise, Coimbatore, which invalidated the previous rulings. The Tribunal emphasized that the date of receipt was crucial for determining credit eligibility under Rule 57Q, as established in M/s. Shri Srinivas Frozen Foods v. Commissioner of Central Excise, Hyderabad.

The Tribunal concluded that the order of the Commissioner (Appeals) was valid and upheld it, rejecting the Revenue's appeal. The cross-objection filed by the respondents was also disposed of accordingly. The judgment highlighted the importance of maintaining a consistent approach in determining the eligibility of items for capital goods credit under Rule 57Q, emphasizing the relevance of past precedents and the specific functionalities of the items in question.