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TMI Blog1997 (12) TMI 333X X X X Extracts X X X X X X X X Extracts X X X X ..... goods as capital goods under Rule 57Q. The Department alleged that pressure gauges, process control instruments, electronic digital scale, Black Steel Tube, S.S. Powder, S.S. Filters, Digital Multimeters, Spinnerette Inspection Equipment, Quadraflow Cooling Tower Components, Cold Water Cleaning Machines are not capital goods. Accordingly, a Show Cause Notice was issued to the Appellants asking them to explain as to why Modvat credit should not be disallowed on the items and why penalty should not be imposed on them. 3. The Appellants, in reply to the Show Cause Notice, submitted that the goods are capital goods or they are spares and, therefore, they are eligible for Modvat credit as capital goods under Rule 57Q. After careful considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. (ii) Electronic Control Panel. It was argued by the ld. Counsel that to obtain moisture-free polyester chips suitable for spinning, they are heated by air at controlled temperature by firing the thyristers automatically. Since the Appellants were manufacturing yarn and, therefore, it was an essential item of capital goods for the appellants. In so far as the function of the item is concerned, the ld. DR submits that he reiterates the finding of the lower authorities. On careful consideration of the submissions made, we note that Power Panels, Power Transformers or Compressors etc. are covered by the decision of the Tribunal in the case of Bell Granito Ceramics Ltd. v. CCE, Vadodara [1997 (72) ECR 694]. Panel Boards are further cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The tank is required to change one substance i.e. Chips containing polymer dust to the other i.e. polymer dust-free chips suitable for spinning. It was emphasised that the function of the storage tank was that of cleaning of polyster chips and then keeping it as required. The ld. Counsel submits that from the function, it is clear that it is an essential part of the machinery and plant required for the manufacture of the final product. I agree with the contention of the Counsels for the Appellant and hold that Chips Storage Tanks are part of the plant and are capital goods for purposes of Rule 57Q and, therefore, they will be eligible for Modvat credit. (v) Alphaline Differential Pressure Transmitter Other Instruments Apparatus (p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily parts and spares or tools for a plant and machinery and, therefore, no Modvat credit will be admissible on these tanks. (viii) Spin Finish Metering Pump/Spares for these. This is a measuring instrument. There are a number of decisions of the Tribunal holding that measuring instruments are capital goods for purposes of Rule 57Q. Therefore, Modvat credit will be admissible on these items as capital goods. (ix) Heating Elements, Coil Elements, Heater etc. These are general items, can be used anywhere and not necessarily a part of plant machinery. However, any of these items, if used inside the plant in the Machines or Electrical Equipments, they will be entitled to Modvat credit under Rule 57Q. The only condition will be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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