1998 (11) TMI 204 - AT - Central Excise

Summary

Issues:
- Eligibility of Load Cells for Modvat credit under Rule 57Q
- Eligibility of Capacitors for Modvat credit under Rule 57Q

Eligibility of Load Cells for Modvat credit under Rule 57Q:
The appeal challenged an Order-in-Original regarding duty demand of Rs. 7,890 for Load Cells and Capacitors. The appellant argued that Load Cells are integral parts of Weighing Scales, considered capital goods eligible for Modvat credit under Rule 57Q. Citing previous Tribunal decisions, the appellant contended that parts of capital goods are also eligible for Modvat credit. The appellant emphasized that Load Cells should be eligible based on established precedents. The respondent, however, referred to a previous case where measuring instruments were not considered eligible for Modvat credit as capital goods. The appellant distinguished this case by highlighting the evolution of Modvat schemes and the direct connection of Load Cells to manufacturing equipment. The Tribunal examined past decisions and concluded that Load Cells, being integral to Weighing Scales, qualify for Modvat credit under Rule 57Q.

Eligibility of Capacitors for Modvat credit under Rule 57Q:
Regarding Capacitors, the appellant argued that they are essential components affixed to electric motors, which are capital goods directly linked to manufacturing equipment. The appellant relied on a Tribunal decision involving static convertors to support the eligibility of capacitors for Modvat credit. The appellant contended that capacitors, regulating the speed of electric motors, play a crucial role in manufacturing processes. The Tribunal acknowledged the function of capacitors in maintaining the proper functioning of electric motors and noted the similarity to the static convertors case. Drawing parallels, the Tribunal held that capacitors, being vital components for electric motors in manufacturing activities, are eligible for Modvat credit under Rule 57Q. Consequently, the impugned Order-in-Appeal was set aside, and the appeal was allowed, granting the requested relief.