2000 (1) TMI 517 - AT - Central Excise

Summary

Issues:
Claim of Modvat credit on an electronic weighing machine under Rule 57Q of the Central Excise Rules, 1944.

Analysis:
The appellant, engaged in manufacturing HDPE/PP tape, fabrics, and sacks, availed Modvat facility under Rule 57A and Rule 57Q. A Show Cause Notice was issued questioning the Modvat credit claimed on an electronic weighing machine. The adjudicating officer disallowed the credit under Rule 57Q, directing reversal. The appellate authority upheld this decision, leading to the current appeal.

Explanation to Rule 57Q defines capital goods as machinery, equipment, tools, etc., used for production or processing of goods. The weighing machine in question does not produce or process goods, nor bring about any change in substances. While components of machinery fall under Clause (b), the weighing machine falls under Clause (c) meant for weighbridges in the factory. The denial of credit was based on this distinction, which the appellant contested.

The Tribunal analyzed previous decisions where a weighing machine was considered a capital good under Rule 57Q. The weighing machine's precision and role in manufacturing and marketing goods were highlighted, supporting its classification as a necessary capital equipment. The Tribunal agreed with these precedents, ruling in favor of the appellant.

In conclusion, the Tribunal allowed the appeal, setting aside the orders of the lower authorities that denied capital goods credit for the electronic weighing machine.