1997 (12) TMI 185 - AT - Central Excise

Summary

Issues involved: Appeal challenging parts of the Order-in-Appeal modifying the order-in-original regarding credit eligibility under Rule 57Q of the Central Excise Rules for various items.

Summary:
The appellant, engaged in manufacturing Steel Ingots, availed credit under Rule 57Q for certain items. The Show Cause Notice challenged the eligibility of some items for credit, leading to disallowance by the Asstt. Commissioner. In appeal, credit for some items was allowed while rejected for others, resulting in grievances from both the assessee and the department.

The Oxygen Lancing Pipe, essential for connecting Oxygen tank to the furnace, was contested for credit eligibility. The Tribunal determined that the pipe, facilitating the process of burning and oxidation, should be considered a component of the plant, thus qualifying as "capital goods" under Rule 57Q.

Similarly, the C.I. Trumphet and Capacitors, utilized in the manufacturing process, were deemed eligible for credit under Rule 57Q as they were integral components of the plant.

Contrarily, Tor Steel, M.S. Rounds, and M.S. Angles, used in building construction for factory expansion, were not considered direct components of capital goods under Rule 57Q, leading to their exclusion from credit eligibility.

Reference was made to a High Court decision regarding the interpretation of the term "Plant" under the Income Tax Act, emphasizing the broader understanding of the term in certain contexts. However, the Tribunal concluded that the building housing the furnace should not be regarded as "Plant" under Rule 57Q, thereby excluding certain building components from credit eligibility.

Ultimately, the Tribunal allowed credit for the Oxygen Lancing Pipe while upholding the rejection of credit for other items, resulting in a partial allowance of the assessee's appeal and dismissal of the department's appeal.