2007 (5) TMI 164 - AT - Central Excise

Credit on Split air conditioners used in maintaining control panel etc. In light of amendment Not. 11/95 and Tribunal s Larger Bench decision in Jawahar Mills case air-conditioners are eligible for capital goods credit under Rule 57Q

Summary

Issues:
Whether Modvat credit on split air-conditioner used for maintaining control panel in Mill House is admissible under Rule 57Q of Central Excise Rules, 1944.

Analysis:
1. The key issue in this case revolves around the admissibility of Modvat credit on a split air-conditioner under Rule 57Q. The appellant relies on past decisions where Modvat credit was denied on similar grounds. However, the respondent argues for eligibility based on precedents like the Shriram Needle Bearing Industries case.

2. Upon reviewing the submissions and case law, it is evident that conflicting decisions exist regarding the eligibility of air-conditioners for Modvat credit under Rule 57Q. The Tribunal's Larger Bench directed the resolution of this conflict in light of the Jawahar Mills case, which was affirmed by the Supreme Court. The appellant's argument against the applicability of the Jawahar Mills case is refuted based on the Tribunal's decision in the Shriram Needle Bearing Industries case.

3. The Shriram Needle Bearing Industries case established that a split air-conditioner qualifies as a capital good under Rule 37Q(1) as per the amended notification of 1995. Given that the present dispute aligns with the same period, the decision to allow capital goods credit for split air-conditioners in July-August 1995 is upheld.

4. Consequently, the appellate authority's decision to grant capital goods credit to the respondents for split air-conditioners during the specified period is affirmed, leading to the dismissal of the appeal. This ruling emphasizes the application of relevant notifications and precedents in determining the eligibility of Modvat credit for specific equipment.

Conclusion:
The judgment upholds the admissibility of Modvat credit on split air-conditioners used for maintaining a control panel in a Mill House under Rule 57Q, based on the interpretation of relevant notifications and precedents. The decision highlights the importance of consistent application of legal principles and past rulings in resolving disputes related to excise rules and capital goods credit eligibility.