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TMI Blog2013 (7) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... g the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer. Further, the items considered in the cases decided by the Apex Court reported in [2001 (7) TMI 118 - SUPREME COURT OF INDIA] were power cables and capacitors in Jawahar Mills case; control panels, cables, distribution boards, switches and starters and air compressors in the case of Indian Refrigeration Co. Ltd.; electric wires and cables in the case of Kothari Sugar and Vijay Chemicals on appeals preferred by the Revenue. Thus, on a consideration of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, show-cause notice was issued for withdrawal of the benefit. The assessee contended that the cables were used only in the factory for the purpose of providing communication within the factory between different locations. Consequently, the claim of the assessee for availing MODVAT credit could not be denied. The Assessing Officer, however, rejected the plea that the capital goods should have a nexus to the final product. Since telephone cables were used for communication purpose, the claim of the assessee merited to be rejected. Aggrieved by this, the assessee went on appeal before the Commissioner of Central Excise (Appeals), who allowed the appeal based on the decision reported in 1998 (108) ELT 47 (Tri.) (Jawahar Mills Ltd. Vs. CCE, Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time. Thus, the decision that would have application to the case on hand would be the decision reported in 2001 (132) E.L.T. 3 (S.C.) (Commissioner of C.Ex., Coimbatore Vs. Jawahar Mills Ltd.), which confirmed the view of the Tribunal, holding that the claim of the assessee could not be negatived; consequently, no case on capital goods used in the factory was made out by the Revenue to upturn the order of the Tribunal. 5. Heard learned counsel appearing on either side and perused the material placed on record. 6. The provisions of Rule 57Q of the Central Excise Rules, 1944, as it existed during the relevant period, relating to C.M.A.No.1390 of 2007 relating to the period December 1999 to February, 2000: "Rule 57Q. Applicability. -- (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No.68.02 and sub-heading No.6801.10 of the First Schedule to the Central Excise Tariff Act, 1985; (ii) components, spares and accessories of the goods specified at (i) above; (iii) moulds and dies; (iv) refractories and refractory materials; (v) tubes and pipes and fittings thereof, used in the factory; and (vi) pollution control equipment, used in the factory of the manufacturer of the final products. Explanation. - For removal of doubts, it is hereby clarified that "capital goods" do not include any equipment or appliances used in an office. (b) "exempted goods" means goods which are exempt from the whole of the duty of excise leviable thereon, and include ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Apex Court pointed out to the definition of "capital goods" in Clause (c) to the Explanation to Section 57Q that "the goods enumerated in clause (c) need not be used for producing the final product or used in the process of any goods for the manufacture of final product or used for bringing about any change in any substance for the manufacture of final product and the only requirement is that the same should be used in the factory of the manufacturer." In so holding, the Apex Court referred to the decision reported in 1996 (86) E.L.T. 177 (S.C.):(1996) 5 SCC 488 (Indian Farmers Fertilisers Cooperative Ltd. Vs. Collector of Central Excise, Ahmedabad) and pointed out that the user will determine whether an item in question qualified or not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, the decision reported in 2000 (240) E.L.T. 641 (S.C.) (Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi-III) related to the period January, 2003 to October 2003, and November, 2003 to March, 2004. Thus, based on the provisions of law thus available, the Apex Court held that the electric wires not being used in the manufacture of final product, CENVAT credit was not available in such case. In the matter of considering a question as to the assessability or grant of relief under the Act, the provision as it stood at the material point of time would alone be relevant and not any other provision. In the circumstances, we reject the reliance placed on the decisions reported in 2007 (214) E.L.T. 481 (S.C.) (Collector of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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