9911796707
TMI Blog1998 (3) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... items have been rightly denied by the lower authority. Along with the two items, there are 3 other items which are used as spare parts which have also been denied benefit on the ground that wagon loader itself is not capital goods and spare parts also do not get the benefit. These spare parts are : (a) cables used for wagon loader (b) electric spares for wagon loader (c) electric spares used in energy meter 2. Before the Commissioner, the appellants had relied on the Supreme Court judgments rendered in the case of M/s. Eastend Paper Industries Ltd. v. CCE reported in 1989 (43) E.L.T. 201 and that of CCE v. M/s. Rajasthan State Chemical Works reported in 1991 (55) E.L.T. 444. However, the ratio of these judgments have not been appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d again it was incorporated by Notification No. 6/97, dated 1-3-1997. It is his contention that the definition of the term capital goods as in Explanation 1(a) appearing during the period 1994 as well as 1995 was replaced in the subsequent Notification No. 14/96-C.E. (N.T.), dated 23-7-1996. This notification does not have the said definition of capital goods as was present in the earlier Rule 57Q which delenated the definition as incorporated above. It is his submission that the present notification in existence only states capital goods means following goods falling within the schedule to the Central Excise Tariff Act, 1985 and used in the factory of manufacture viz. : All goods falling under Chapter 84 (other than internal combustion e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... guments of the ld. Advocate, Shri Rama Rao, the ld. JDR submits that for considering the item wagon loader as a capital goods it has in the first instance to fall within the definition of the term `capital goods as was in existence in 1994, which means that it has to be goods which are in the nature of machines, machinery, plant, equipment, apparatus or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products. It is his submission that admittedly the item is used after RG 1 stage and the goods are being removed from the Bonded storeroom. The goods are lifted from the yard and placed on the railway wagon. It is a post-manufacturing activity and hence the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point and states that this judgment has not dealt with the points in the earlier judgment of the Tribunal as in the case of J.K. Synthetics cited supra. He also quotes this Bench Order No. 2658/97 as in the case of CCE v. Swastik Enterprises, wherein, the Bench expressed the view that in the background in which the reasoning has been made therein, it has to be held that Notification No. 14/96 could not be taken to be clarificatory in nature so far as the question of availability of Modvat credit in respect of generator sets is concerned and the said decision of the Tribunal in the case of J.K. Synthetics is to be held as distinguishable in the facts of this case. 10. The ld. Consultant pointed out that the Tribunal very categorically laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been held to be having retrospective effect. It follows that the wordings which were there in Explanation 1(a) of Rule 57Q with regard to the term capital goods as delenated above has since been replaced and in its place capital goods means goods which are used within the factory itself and which fall within the chapter heading indicated therein. It is clear that this Chapter Heading 84.28 and 68.01 both find its place within the definition of capital goods in terms of Notification No. 14/96. Therefore, in terms of the Notification No. 14/96, both the items will be entitled to the benefit of Modvat credit. 13. Although the ld. DR has made a pertinent point and has taken support from two of the rulings by this Bench as in the case of Shan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have retrospective effect, then it follows that the rule has been replaced by a new rule as is in existence, which means the meaning of the term capital goods will not be as was in existence in Explanation 1(a) of Rule 57Q, in the Year 1994 or 1996. Therefore, the submission made by the ld. DR is required to be negatived. 15. In that view of the matter, the impugned order not granting benefit to wagon loader and its parts requires to be set aside and it has to be held that they are entitled for the Modvat credit. 16. As regards the item diamond grinding wheel falling under Chapter Heading 68.01, it is clear that the same has been used for grinding cement and, therefore, this benefit has to be granted. Even for argument sake if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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