2004 (6) TMI 174 - AT - Central Excise

Summary

Issues involved: Eligibility of capital goods credit in respect of cement, TOR/Steel Bars, and Transformer.

Eligibility of Transformer less than 75 KVA:
The appeal by Revenue questioned the eligibility of capital goods credit for a transformer below 75 KVA under Rule 57Q. The Respondent argued that such transformers are used in the production or processing of goods in the factory, making them eligible for credit. The Tribunal, citing a Supreme Court judgment, ruled in favor of the Respondent, stating that the transformer qualifies as a capital good under the Explanation to Rule 57Q.

Cement, TOR Steel, and Steel Structures:
Regarding cement, TOR steel, and steel structures used in the foundation of machines and equipment, and for installation of conveyors, the Tribunal analyzed the definition of capital goods. It was argued that these items are integral to the machinery and equipment. However, the Tribunal held that as per the interpretation by the Supreme Court, items used in civil construction for installing capital goods do not qualify as capital goods. Therefore, cement, TOR steel, and steel structures were deemed ineligible for capital goods credit under Rule 57Q.

Decision:
The Tribunal rejected the Revenue's appeal concerning the eligibility of a transformer below 75 KVA for capital goods credit, affirming its status as a capital good. However, the appeal of the Revenue was allowed in relation to cement, TOR steel, and steel structures, as these items were considered ineligible for capital goods credit under Rule 57Q.