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TMI Blog2007 (8) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... os White Dry Style, Asbestos Gland Packing Style, Asbestos Rope, Low Pressure Jointing Sheets etc. According to the Revenue, these goods did not qualify under the definition of Capital Goods under Rule 57Q of the erstwhile Rules during the relevant period. These items were used for day-to-day repairing and maintenance work, and were not used in the manufacture of final products. A show cause notice was, therefore, issued on 27-10-1999 for recovery of the Modvat credit wrongly taken and proposing penalty. 2.1 According to the appellant, the items in dispute were capital goods. The adjudicating authority held that, Welding Electrodes were consumables and used for the purpose of repair and maintenance, and were not eligible for capital goods. This view, taken by the Tribunal in CCE, Noida v. M/s. DSM Ltd., vide Final Order dated 27-5-2003 [2003 (162) E.L.T. 987 (Tribunal)] (in the appellant s own case), was followed by the adjudicating authority. As regards the items Angle, Channel, Plates, Bar etc., which were said to have been used as parts/components/accessories for supporting 80 Ton Pan, which was essential for manufacture of sugar, by following the decision of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued on 7-5-2003 for the period from April, 2002 to December, 2002 proposing denial of Modvat credit of Rs. 3,57,043/-, wrongly availed by the assessee in respect of Welding Electrodes, Tore Steel, HR Coils, H Beam, Plates, Antena Cables, Channels, MR Coils, Plates, MS Beams, Round etc. According to the Revenue, these items were used for erection and civil work and had no direct or indirect relation with manufacture of the final product. The adjudicating authority, vide its order dated 23-2-2005, disallowed the said Modvat credit, imposing penalty of the like amount and directing interest to be paid. 6. The learned Counsel appearing for the appellant, in all these appeals, contended that, the Appellate Commissioner did not consider the uses to which these items were put. He submitted that, these items were used for the machinery, which was utilized for manufacture of sugar and, therefore, they should be treated as parts, components or accessories of the machinery of the sugar factory. He also submitted that, even though the appellant had taken up a stand that these were capital goods or parts, accessories or components thereof, they should be considered to be eligible for Cenvat c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... U, dated 2-12-1996; Departmental Clarification published in 2000 (117) E.L.T. T-37; and Notification No. 67/95-CE, dated 16-3-1995, in support of his contentions. 7. The learned authorised representative for the Department submitted that, it was amply proved from the record that, none of the items can be considered to be Capital Goods . He submitted that, since the claim was made in respect of these items as Capital Goods , Modvat credit cannot be allowed on the ground that they were inputs. In support of the reasoning of the Appellate Commissioner that Modvat credit was inadmissible in respect of welding electrodes, he relied upon the following decisions : (i) Jaypee Rewa Plant v. Commissioner of Central Excise, Raipur, 2003 (159) E.L.T. 553 (T-LB); (ii) Triveni Engg. Industries Ltd. v. CCE, Meerut, 2005 (186) E.L.T. 158 (T-LB); (iii) J.K. Cement Works v. Commissioner of Central Excise, Jaipur, 2007 (211) E.L.T. 235 (T) = 2007 (6) S.T.R. 60 (Tribunal); (iv) U.P. State Sugar Corpn. v. CCE, Meerut, 2006 (206) E.L.T. 296 (T); (v) Kisan Sahakari Chini Mills v. Commissioner of Central Excise, Meerut, 2005 (179) E.L.T. 246 (T); (vi) Commissioner of Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sconceived, because the Head Note is wrong and says something which is totally opposite to what has been stated in the body of the judgment in paragraph 5. It is, therefore, essential to set out both, the Head Note as well as paragraph 5 of the judgment from which it is purported to have been culled out. The Head Note of the said report reads as under : Cenvat/Modvat - Capital goods/inputs - When in substance credit is admissible either on ground that goods are eligible capital goods or are used as eligible inputs, mere wrong mention of head under which they are claimed should not make any difference, if and when the entitlement to it is otherwise established under law - Rules 2(a) and 3 of Cenvat Credit Rules, 2004. [para 5] The paragraph 5 of the said judgment reads as under : 5. As regards the welding electrodes, since the matter was covered by the ratio of the decision of the Larger Bench in Jaypee Rewa Plant v. CCE Raipur, reported in 2003 (159) E.L.T. 553 (CEGAT-LB), which was followed in J.K. Cement Works v. CCE, Jaipur, reported in 2007 (6) S.T.R. 60 (T) = 2007 (78) R.L.T. 581 (CESTAT-Del.), the claim in respect of welding electrodes was not pursued. It is evident ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed for fabrication of steel structures and cannot be treated as Capital Goods , was upheld by referring to the decision of the Hon ble Supreme Court in the case of CCE v. Jawahar Mills Ltd. (supra). It was held that, the subject items were used for fabrication of steel plates, sheets etc. and could not be treated as parts/components/accessories of any machine for the purpose of Modvat credit under Rule 57Q. In another case decided against the appellant by the Tribunal in the case of DSM Sugar Mills Ltd. v. CCE, Kanpur, reported in 2001 (135) E.L.T. 654 (T-Del), the Division Bench observed that, with regard to plates, channels, joists etc., the submission of the Departmental Representative was right to the extent that these were items of common civil structures and in normal course would not be eligible for Modvat credit. It was, however, directed that, the decision of the actual use may be verified. All these items, which are mentioned in the user statement prepared by the appellant, which is on record, show that they cannot be considered to be any part, component or accessory of the capital goods. In the case of Bajaj Hindustan Ltd. v. CCE, Lucknow (supra), similar contention fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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