1989 (6) TMI 222 - AT - Central Excise

Summary

Issues:
1. Whether the value of certain items, such as transformer, process storage tanks, anodes, and electrical installations, should be included in calculating the total value of plant and machinery for availing benefits under specific notifications.
2. Whether the process storage tanks and transformer should be considered as part of the plant and machinery installed in the industrial unit.
3. Whether the value of process storage tanks and transformer should be included in the total value of plant and machinery for the purpose of notification.
4. Whether the cost of anodes should be included in the total value of plant and machinery.

Detailed Analysis:
1. The appeal challenged the order of the Collector of Central Excise regarding the total value of plant and machinery installed in the appellants' unit. The appellants had availed benefits under specific notifications, and the dispute arose over the inclusion of the value of certain items like transformer, process storage tanks, anodes, and electrical installations in the calculation of the total value. The Collector concluded that the total value exceeded the prescribed limit of Rs. 20 lakhs, leading to the appeal.

2. The dispute primarily revolved around whether the process storage tanks and transformer should be considered part of the plant and machinery installed in the industrial unit. The appellants argued that the tanks were not part of the plant and machinery as defined in the notifications. The Collector, however, considered the tanks essential for the manufacturing process and included their value in the calculation. The Tribunal analyzed the definitions of "install" and "plant" to determine whether structures like the tanks should be considered installed for inclusion in the total value of plant and machinery.

3. Regarding the process storage tanks, the Tribunal observed that while the tanks were used for storage and effluent treatment, their value inclusion for the notification's purpose required scrutiny. The Tribunal emphasized that the legislative intent focused on plant and machinery installed in the industrial unit. It deliberated on the definition of "install" and concluded that structures like masonry tanks should not be automatically included in the total value calculation. The Tribunal highlighted the distinction between movable and immovable structures in the context of the notifications.

4. In the case of the transformer, the Tribunal noted the lack of detailed findings by the Collector on its usage in relation to the manufacturing process. It differentiated between transformers used solely for power supply conversion and those integral to specific manufacturing needs. The Tribunal emphasized the necessity of establishing the transformer's role in the manufacturing process to determine its value inclusion in the total value calculation. The Tribunal remanded the case for further examination and directed the lower authority to reconsider the issues in light of its findings, allowing the appellants an opportunity to present additional evidence.