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TMI Blog2008 (6) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... nue (present appellant) was partly allowed. 2. Heard learned counsel for the parties. 3. Brief facts of the case are that respondent M/s. India Glycols Ltd. are manufacturer of Glycol and other industrial chemicals. During the period 1994-95 (upto Feb., 1995) they availed Modvat credit to the tune of Rs. 14,73,523/- towards duty paid on various goods claimed to be covered within the ambit of 'capital goods'. A show cause notice dated 8-3-1995, disallowing said credit was issued under Rule 57Q of the Central Excise Rules, 1944, by the department to the respondent (assessee), and after considering the reply of the assessee, the adjudicating authority vide its order dated 20th April 1999, allowed the credit to the tune of Rs. 6,91,952.92, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 16-3-1995, retrospectively for the year 1994-95, and in affirming the exemption granted by the Commissioner (Appeals) in respect of the laboratory homogenizes, lab scientific/hospital equipments; module of Chapter Heading No. 85.38; gas detection systems of Chapter Heading No. 85.31; lube/sealant of Chapter Heading No. 32.14; tower packing of Chapter Heading No. 84.19? 5. Mr. Arvind Vashistha, learned Standing Counsel for the appellant argued that the CESTAT has erred in law in affirming the exemption of the aforesaid items as 'capital goods' for the period of 1994-95 (up to Feb., 1995) i.e. before the definition of 'capital goods' was amended vide Notification No. 11/95-CE. (N.T.), dated 16-3-1995. 6. Before further discussion, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods falling under sub-heading Nos. 5001.10, 5301.10, 5301.20, 5301.90, 5303.10, 5303.20 and 5303.90." The aforesaid definition was amended vide Notification dated 16-3-1995, and clause (d) and clause (e) were added to the existing definition of 'capital goods'. The same are reproduced, hereunder: "(d) Following goods falling within the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) and used in the factory of the manufacturer. (i) All goods falling under heading Nos. 84.02, 84.05,84.06, 84.11, 84.12, 84.16, 84.17, 84.19, 84.21, 84.23, 84.25 to 84.28, 84.80, 85.05, 85.35, 90.11, 90.12, 90.13, 90.16, 90.17 and 90.24 to 90.31; (ii) Auxiliary plants falling under heading No. 84.04 for use with boilers of heading No. 84.02; (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the respondent (assessee) drew attention of this Court to the principle of law laid down in Commissioner of Central Excise, Coimbatore v. Jawahar Mills Ltd.; 2001 (132) E.L.T. 3 (S.C.), and argued that since the definition of expression 'capital goods' was liberal even prior to the Notification dated 16-3-1995, and as such, by adding clause (d) and clause (e) in Rule 57Q, practically and substantially it did not change the definition of the expression 'capital goods'. We have gone through the aforesaid case law. Para 4 of aforesaid case reads as under : "The aforesaid definition of 'Capital goods' is very wide. Capital goods can be machines, machinery, plant, equipment, apparatus, tools or appliances. Any of these goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... processing of any goods or for bringing about any change in any substance for the manufacture of final product. Similar view was taken by the Madras High Court in Siv Industries Ltd v. Commissioner of Central Excise, Coimbatore - 2001 (129) E.L.T. 48 (Mad.). 9. Having gone through the Notification No. 4/94-C.E., dated 1-3-1994, by which Rule 57Q was introduced; Notification No. 11/95-C.E. (N.T.), dated 16-3-1995, whereby clause (d) and clause (e) were added and Notification No. 14/96-CE. (N.T.) dated 23-7-1996, which substituted clause (a), clause (b) and clause (c) as it existed prior to 16-3-1995, it is abundantly clear that the meaning of 'capital goods' which was liberal prior to 23-7-2006 was not restrictive. However, now under Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontrol equipment." 10. In view of the definition of 'capital goods' as it existed prior to 23-7-1996, and accepted by the Apex court in Commissioner of Central Excise, Coimbatore v. Jawahar Mills Ltd. (supra), we are of the view that the CESTAT has committed no error of law by allowing the Modvat credit to the assessee in respect of (i) Laboratory Homogenizes, Lab Scientific/Hospital Equipments (ii) Module of Chapter Heading No. 85.38 (iii) Gas Detection Systems of Chapter Heading No. 85.31 (iv) Lube/Sealant of Chapter Heading No. 32.14 and (v) Tower Packing of Chapter Heading No. 84.19, for the year 1994-95 (up to Feb., 1995), used for manufacture of glycol and other industrial chemicals in their factory. 11. For the reasons, as discusse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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