2001 (9) TMI 100 - HC - Central Excise

Summary

Issues:
1. Interpretation of Rule 57Q of Central Excise Rules regarding the applicability of Modvat credit on electrical cables used in manufacturing.

Analysis:
The judgment pertains to a reference application filed under Section 35G(3) of the Central Excise Act, 1944, concerning the interpretation of Rule 57Q of the Central Excise Rules. The key question raised was whether the benefit of capital goods could be extended to 'electric cables' under Rule 57Q when not used in the manufacture of final products. The assessee, engaged in manufacturing excisable goods, had availed Modvat credit on electrical cables used for manufacturing purposes. Rule 57Q outlines the applicability of allowing credit of specified duty paid on capital goods used in the factory for manufacturing final products. The issue raised was whether electric cables qualified as capital goods under this rule since they were not considered a "plant."

The court referred to the Supreme Court's decision in Scientific Engineering House (P) Ltd. v. Commissioner of Income Tax, Andhra Pradesh, where the definition of 'plant' was discussed. The Supreme Court held that 'plant' includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business, and it is not limited to apparatus used for mechanical operations. The article must have some durability to qualify as plant. Applying this definition, the court concluded that electric cables used by the assessee for its foundry were indeed 'plant' under Rule 57Q as they were essential for carrying on the business and had the required durability.

Based on the above analysis, the court found that the issue raised in the reference application was already settled by the Supreme Court's interpretation of 'plant' in a different context. The court deemed the question as purely academic and rejected the reference application without the need for further examination or calling for a statement of the case. The judgment reaffirmed that electric cables used in the manufacturing process qualified as 'plant' under Rule 57Q, thereby allowing the assessee to avail the Modvat credit on the electrical cables used for manufacturing purposes.