9911796707
TMI Blog2022 (10) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... y them. Proceedings for recovery of the said credit was premised on the definition therein having excluded 'consumables', which the impugned goods were held to be, from the enumeration therein. 2. The dispute had been carried once before through the appellate hierarchy to the Hon'ble High Court of Bombay before being remanded back to the original authority for ascertaining the manner of use of the 'welding electrodes' to qualify as 'capital goods' as laid down by the Larger Bench of the Tribunal in Jawahar Mills Ltd v. Commissioner of Central Excise, Coimbatore [1999 (108) ELT 47 (Tribunal)]. The adjudicating authority had, in accordance with the directions of the Hon'ble High Court of Bombay, scrutinized the usage of the 'welding electrod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the process of manufacture in detail, has found that the 'welding electrodes' are not 'capital goods' while it is the claim of the Learned Counsel for appellant that welding is necessary to keep the equipment in working condition and the sole alternative would have been to purchase a new machinery. According to him, it is not the intent of the law that a business decision on deployment of new machines should be contingent upon interpretation of tax statutes and, therefore, the adjudicating authority was incorrect in arriving at the conclusion in the impugned order. 5. The question that arises is whether 'welding electrodes' are 'consumables' as held by the original authority or are used in the manufacture of excisable goods and, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealt with the decision of Jaypee Rewa Plant (supra). In paragraph 11, the Rajasthan High Court observed that in the case of Jaypee Rewa Plant (supra), only a portion of relevant paragraph of the decision of the Apex Court in the case of J.K. Cotton Spinning and Weaving Mills Company Limited was reproduced and the material portion which lays down that the goods need not be ingredients or commodities used in the process, nor must they be directly and actually needed for "turning out or the creation of goods" was not considered. The Rajasthan High Court therefore, proceeded to hold that the decision of the Larger Bench of the Appellate Tribunal is no longer a good law. The same issue arose for consideration of Chhattisgarh High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible, but would be commercially inexpedient.' 7. MODVAT credit is available on procurement of goods that are 'inputs' with 'capital goods' being entitled to the extent of conformity with Explanation of that expression in rule 57Q of Central Excise Rules, 1944. Doubtlessly, there is no mention of 'consumables' in the said Explanation but neither is it certain that that 'consumables' has little to do with manufacturing process for depriving eligibility for MODVAT credit. It is not anybody's case that 'consumables' cease to exist over period of usage; it is merely that replenishment is required owing to the nature of the product. The common understanding of 'consumables' is that of depletion without transfer to the goods deployed for manufact ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
