9911796707
TMI Blog2001 (9) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... tive; that the words used in explanation to Rule 57Q are in manufacture of and not in or in relation to manufacture; that this explicitly demands that those capital goods or their parts should have direct role in production process; that some items may be used in relation to manufacture of final goods but these cannot be considered to be used in the manufacture as required by Rule 57Q, The authorities below observed that such goods as are not used for producing or processing of any goods or for bringing about any change in any substance in the manufacture of final products are not capital goods. The authorities below, therefore, disallowed Modvat credit on the goods. 3. Arguing the case for the appellant Shri R. Santhanam, ld. Counsel submits that their case is fully covered by the decisions of the Larger Bench of this Tribunal in the case of Jawahar Mills Ltd. reported in 1999 (108) E.L.T. 47. He referred to Paras 32, 34, 35, 39, 40 and 41 of Jawahar Mills Ltd. Ld. Counsel submitted that similar view was expressed by the Larger Bench of this Tribunal in the case of Surya Roshini Ltd. reported in 2001 (128) E.L.T. 293. He refers to Paras 9, 10 and 12. 4. Ld. Counsel also states ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the answer is in the affirmative it will be a plant . As already seen, though the above decision was rendered in the context of Section 43(3) of the Income Tax Act, 1961, which contained a very wide definition of the expression plant , the above interpretation of the expression plant , was not because of any special or particular definition of that expression in the Income Tax Act. Therefore, the test laid down by the Supreme Court in the above case would be relevant for construing the expression plant employed in Explanation 1(a) to Rule 57Q. Interestingly, even without reference to the aforesaid judgment of the Supreme Court, the Single Member Bench of this Tribunal in Valley Abrasives Ltd. v. CCE - 1997 (91) E.L.T. 700 has held as under : 6. Therefore, it has to be taken in the sense in which the trade generally understands it, plant is understood in the context of manufacture of goods, as a place where aggregate of machines, machinery equipment, etc. which produces or processes the goods are installed. I do not find any specific reason to restrict the meaning of the word plant in the context of the beneficial provision that Rule 57Q is. Keeping in view the general ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation for bringing about any change in any substance for the manufacture of the final product. However, we are concerned with the meaning of the expression used for producing or processing . The said expression would not, to use the language of the Supreme Court in J.K. Cotton Spg. Wvg. Mills Co. Pvt. Ltd. be limited to ingredients or commodities used in the process or those directly and actually needed for turning out or the creation of the goods. 39. The matter may be considered in the light of the above. Wires and cables would be covered by the expression plant being an item necessary for the assessee to carry on his business and being an item not in the nature of a consumable, but an item having fairly high degree of durability. It therefore, satisfies the definition of plant. 40. Similarly, the other items involved in these cases namely control panels, cables, welding electrodes, etc. will also qualify as capital goods under Rule 57Q and would be eligible for Modvat credit and we order accordingly. 41. In the light of the above, the issue as to whether the amendment effected in Notification 11/95, dt. 16-3-95 under Rule 57Q and Notification 14/96-C.E., dt. 23-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re eligible for Modvat credit even if they do not satisfy any of the three tests mentioned in the second part of clause (a) of the Explanation. Such goods, even if they are not satisfying the test, will become eligible for Modvat credit by the specific inclusion by the notification with effect from the date of the notification . I further find that the Apex Court in the case of Jawahar Mills Ltd. in Paras 6 7 held as under : 6. The contention of ld. Additional Solicitor General that the aforesaid decision and other decisions referred by the Tribunal in the impugned order were cases involving sales tax and income tax and, therefore, the Tribunal should not have relied on those decisions is without any substance because the real question is that of the principle laid down by a decision. In view of the liberal language of the provision; Mr. Rohtagi fairly and very rightly did not seriously dispute that if any of the items enumerated in explanation 1(a) is used for any purpose mentioned therein for the manufacture of final products, it would satisfy the test of Capital goods . The main contention of Mr. Rohtagi, however, is that the question whether an item falls within the def ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
