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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 ..... assessee herein are manufacturers of cement, falling under Sub Heading No.2502.29 of the Schedule to the Central Excise Tariff Act, 1985. The assessee availed CENVAT credit on capital goods under Section 57AA of the erstwhile Central Excise Rules, 1944 in respect of Underground Telephone Cable falling under Sub Heading No.8544.90. Admittedly, the goods were used for communication purposes in various places inside the factory premises. On the allegation that ATC Conductor PVC insulation Armoured PVC Sheathed Underground Telephone Cables are, in no way, connected with the manufacturing activity and hence, the credit taken was irregular, show-cause notice was issued for withdrawal of the benefit. The assessee contended that the cables were use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, Delhi-III) and contended that unless the goods in question were used in or in relation to manufacture of the final product, the assessee was not entitled to the benefit of MODVAT credit. He pointed out that the Apex Court had interpreted the expression "in relation to" to have a wider connotation. Consequently, inputs which did not enter into the finished goods would not be entitled for MODVAT credit. 4. Countering the claim made by the Revenue, learned counsel appearing for the assessee pointed out that the reliance of the Revenue on the decisions of the Apex Court rested on the provisions as it existed during the relevant time. Thus, the decision that would have application to the case on hand would be the decision reported in 2001 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e falling under heading Nos.85.09 to 85.13, and (iii) 85.16 to 85.31, 85.39, 85.40) 4. .......................... 7. The said provision was amended with effect from 01.04.2000 under the Central Excise (Second Amendment) Rules, 2000, substituting the existing Rules 57A to 57V of the Central Excise Rules, 2000. Section 57AA, defining "capital goods", was amended with effect from 01.04.2000 as under: " 57AA. Definitions. - For the purpose of this section (a) "capital goods" means - (i) all goods 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re used in the factory of the manufacture of fuel products and the goods not falling under the excluded item, we have no hesitation in accepting the case of the assessee that the item in question being used in the factory of the manufacturer, the assessee would be entitled to CENVAT credit on the cables. 10. In the decision reported in 2001 (132) E.L.T. 3 (S.C.) (Commissioner of C.Ex., Coimbatore Vs. Jawahar Mills Ltd.), the Supreme Court had an occasion to consider Section 57Q as it existed. The 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 manuf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds the reliance placed by the Revenue on the decisions reported in 2007 (214) E.L.T. 481 (S.C.) (Collector of Central Excise Vs. Solaris Chemtech Limited) and 2000 (240) E.L.T. 641 (S.C.) (Maruti Suzuki Ltd. Vs. Commissioner of Central Excise, Delhi-III), the said decisions rested on the provisions relating to the particular period considered therein. While the decision reported in 2007 (214) E.L.T. 481 (S.C.) (Collector of Central Excise Vs. Solaris Chemtech Limited) related to the period 1994, 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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