1999 (10) TMI 336

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..... self adhesive tape and BOPP film falling under Chapter 39 of the Schedule to the Central Excise Tariff Act. Then availed Modvat credit of Rs. 17,053/- on CEL Deck cooling pad 7090, with distributor under Rule 57 Q of the Central Excise Rules on the ground, that these were being used for supplying conditioned air to the tape unit and its purpose was to control the humidity and temperature of the surroundings. The Assistant Commissioner, however disallowed the Modvat credit on these goods by holding that these were not used for producing or processing any of the goods or for bringing about any change in any substance towards the manufacture of the final product vide Order-in-Original No. 86/96, dated 29-11-1996. The appellants filed against .....

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..... ) wherein, it has been so observed. Since the goods in question are not being used for production, processing or bringing about any change in the substance for the manufacture of the final products, and has got no direct nexus with the production of the final products, as these are being used only for dehumidification of the air in the plant, had been rightly held to be not 'capital goods' falling under Rule 57Q of the Central Excise Rules. In C.C.E., Coimbatore v. Shanmugaraja Spinning Mills Pvt. Ltd. (supra) also it has been ruled by the Tribunal that humidification plant though helps in maintaining the certain level of humidity, does not lead to an inference that it is an equipment for the production, processing or bringing about any cha .....

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..... , it has been only observed by the Tribunal that quality control is must for marketability without which manufacture is rarely complete. In the third case, the observations relied upon by the appellants, of the Tribunal that "chilled water coil used for bringing down the temperature in coating room is covered under definition of 'capital goods' under Rule 57 Q. But the law laid down in both these cases does not advance the plea of the appellants for treating their goods to be 'capital goods' as the goods, in question are being used by them for dehumidification of the air in the plant which has got no nexus with the production of final product or for bringing about any change in the substance used for the production of the final product. 12 .....

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