2004 (4) TMI 231 - AT - Central Excise

Summary

Issues:
1. Eligibility of "cooled water cooling twin" under Tariff Heading 84.18 as a capital good in terms of Rule 57Q of the Central Excise Rules.

Analysis:
The dispute in the present appeal revolves around whether "cooled water cooling twin" qualifies as a capital good under Rule 57Q of the Central Excise Rules, falling under Tariff Heading 84.18. The Assistant Commissioner allowed Modvat credit, considering it an accessory to the main processing plant, the 'plastic injection moulding machine'. The revenue challenged this decision before the Commissioner (Appeals), who upheld the allowance of Modvat credit after analyzing the manufacturing process, CBEC's Circular, and previous Tribunal decisions. The Commissioner's order extensively delves into the definition of machinery, emphasizing the interaction and interdependence of components to generate specific results. The Commissioner highlighted the essential role of the "cooled water chiller twin" in the injection moulding process, where it cools down the molten material to shape the plastic articles accurately. The Commissioner cited CBEC's Circular to support the inclusion of accessories as capital goods, irrespective of classification under Rule 57Q.

The Commissioner's ruling was based on the premise that the "cooled water chiller twin" acts as an essential accessory to the main machinery, the injection moulding machine. The Commissioner rejected the revenue's appeal, emphasizing the accessory nature of the chiller in the manufacturing process. The Commissioner disagreed with the revenue's argument that the chiller's independent function excludes it from being classified as a capital good under Heading 84.18. The Commissioner reiterated the importance of the chiller in cooling the moulds for consistent and accurate product formation. The Commissioner referenced previous judgments to support the broader interpretation of capital goods under Rule 57Q, extending the eligibility to components and accessories aiding in the manufacturing process.

In conclusion, the Commissioner dismissed the revenue's appeal, affirming the eligibility of the "cooled water chiller twin" for Modvat credit as a capital good under Rule 57Q. The Commissioner's decision was grounded in the accessory role played by the chiller in the manufacturing process, aligning with the broader interpretation of capital goods under the Central Excise Rules.