1999 (8) TMI 515 - AT - Central Excise

Summary

Issues:
Denial of Modvat credit on specific items by authorities below.

Analysis:
The six appeals addressed common items where Modvat credit as capital goods was denied. The items included Air Conditioners Equipment, Chilling Machine Equipment, Vacuum Cleaner, Control Panel, Impeller for chilling machine, Chilled Water Coil, Centrifugal Compressors, PVC fill sheet, Copper Wire, Hydroblock of Hot water Boiler, Pressure Gauge, Air Filter, Solenoid Valve Spool, Spares for Air Compressors, Set up exhaust drive unit, DC power supply, 'O' Ring, Spares of Hotwater Boiler, Flow control valve, Spares for Exhaust Cart, Protectomat, Rotary Magnetic Rubber Roller, Cooling Tower, Gasket Silicon Rubbers, Seal Gauges, Steton, Diephngar, Plate Heat exchanger, Power supply for PLC, V-V Belts, Digital micro ohm UV Visible Spectrometer, and H.D.P.E. Pipes.

The appellant's counsel categorized the items into spares for machines, electric equipment, material cooling equipment, measuring equipment, and wires/cables. Referring to previous decisions, it was argued that various items fell under the definition of capital goods for Modvat credit under Rule 57Q. The Larger Bench's decision in Jawahar Mills Ltd. emphasized that machinery, machine plant, and appliances used for production or processing of goods are capital goods. Specific items like Air Conditioning equipment, Control Panel, Air Compressors, Copper wire, and Electric equipment were deemed eligible for Modvat credit.

Regarding temperature and humidity controlling equipment, the argument was made that Modvat credit should be allowed on items such as Air Conditioning equipment, chilling machine equipment, Impeller, P.V.C. fill sheet, hydroblock of hot water boiler, and cooling tower parts. The counsel also highlighted that Fork lift and V.V. Belts should be considered material handling equipment eligible for Modvat credit.

The judgment considered the provisions of Rule 57Q and relevant notifications, particularly pre and post-16-3-1995. The Larger Bench's analysis in Jawahar Mills Ltd. was pivotal in determining the admissibility of Modvat credit on the contested items. It was concluded that Modvat credit would be allowed on most items except Vacuum Cleaners, Protectomat, and HDPE pipes. The decision was based on the classification of items as machinery, parts thereof, or capital goods under Rule 57Q.

In conclusion, the appeals were allowed for most items, granting Modvat credit, except for specific exclusions. The judgment emphasized the importance of analyzing items based on their classification as machinery or capital goods under Rule 57Q.