2005 (10) TMI 403 - AT - Central Excise

Summary

Issues:
Grant of capital goods credit on specific items including pumps and transformers prior to 16-3-95.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI involved a dispute regarding the grant of capital goods credit on various items such as spiral welded pipes, junction boxes, electric wires, cables, transformers, cranes, and various pumps. The period of dispute was before 16-3-95. The Tribunal considered precedents where the availability of capital goods credit had been settled against the Revenue in specific cases. It was established that for items like spiral welded pipes, junction boxes, electric wires, cables, and transformers, the capital goods credit was indeed available prior to the mentioned date based on previous judgments. However, the Tribunal noted that the benefit of capital goods credit would not be available for a specific item, the "Toyo Submersible Agitator Sand Pump," as it was used outside the factory premises.

Regarding the various pumps used within the factory, the Tribunal found that these pumps were utilized for pumping water, which was a raw material in the manufacturing process. Citing the Supreme Court's judgment in the Jawahar Mills case, the Tribunal concluded that capital goods credit would be applicable to such pumps for the period of dispute. However, the exception was made for the "Toyo Submersible Agitator Sand Pump," which was determined to be used outside the factory, thus rendering it ineligible for the capital goods credit benefit.

In the final decision, the Tribunal rejected the Revenue's appeal concerning all capital goods except the "Toyo Submersible Agitator Sand Pump." The appeal was allowed to the limited extent of denying capital goods credit to the respondents specifically for the item listed as No. 47 in the Schedule to the show-cause notice. The operative part of the order was pronounced in open Court on 6-10-2005, providing a clear resolution to the issues raised in the appeal.