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2001 (7) TMI 405 - AT - Central Excise
Issues: Availability of capital goods credit under Rule 57Q of the Central Excise Rules for specific products.
Analysis: 1. HPLC Column for Chromatography, Parts of HPLC, and Multipurpose Electronic Platform: The appellant, a pharmaceutical company, argued that these items are essential for manufacturing bulk drugs as they are used in monitoring and controlling reactions, ensuring the quality and efficacy of the final products. The Financial Controller of the appellant contended that without these items, it would be practically impossible to control the reaction process, which is crucial for manufacturing bulk drugs. The appellant relied on the decision of the Larger Bench of the Tribunal in a similar case to support their claim that these items fall within the definition of capital goods under Explanation 1(b) to Rule 57Q(1) of the Central Excise Rules. 2. Counterargument: The Department, represented by the learned SDR, contended that the impugned items do not directly participate in the production or processing of goods or bring about any change in substances for manufacturing final products. Therefore, they argued that capital goods credit was not admissible for these items at the relevant time. 3. Judgment: The Tribunal considered the submissions of both sides and examined the use of the three items in question. Referring to previous decisions, the Tribunal emphasized that the definition of capital goods is not limited to machinery but also includes tools or appliances used in the production, processing, or bringing about a change in substances for manufacturing final products. The Tribunal held that the HPLC column for chromatography and Multipurpose Electronic Platform satisfy the conditions mentioned in the Explanation to Rule 57Q. Additionally, components of HPLC were deemed eligible for capital goods credit under clause (b). Consequently, the Tribunal set aside the impugned order and allowed the appeal filed by the appellant, M/s. Ranbaxy Laboratories Limited.
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