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TMI Blog2001 (7) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... planation 1(a). In respect of the cables of which Mr. Rohtagi gave example, the stand of the revenue before the Tribunal was that the cables per se cannot be treated as 'Capital goods'. The stand of the revenue was not as has been projected now by Mr. Rohtagi. In this view, the question of directing remand of these matters for fresh decision by the Tribunal does not arise. On the facts and circumstances of these cases, therefore, the stand that the items in question are not used for manufacture of final product cannot be accepted for the reasons aforestated. Revenue appeal dismissed. - Civil Appeal No.619-626 of 2000 & Civil Appeal No. 590, 591, 599, 420, 627, 653, 654, 674, 897-901, 819, 818, 799, 806, 816, 817, 874, 873, 872, 842, 1082, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dey, V.J. Francis, K.V. Viswanathan, Ms. Gauri Rasgotra, Suman Jyoti Khaitan, K.K. Mohan, Rajesh, E.C. Agrawala, Rishi Agrawal, R. Santhanam, Mahesh Agrawala, Praveen Kumar, Shri Narain, Sandeep Narain, Ms Anjali, For S. Narain Co., Y.P. Singh, Chatanya Siddharth and Debasis Misra, for the parties. [Judgment per : Y.K. Sabharwal, J.]. - In this batch of appeals the only point in issue is regarding availing of Modvat credit in respect of certain items by the manufacturers treating those items as 'Capital goods' in terms of Rule 57Q of the Central Excise Rules, 1944. The controversy was whether those items were 'Capital goods' or not within the meaning of Rule 57Q. 2.Rule 57Q was introduced by Notification No. 4/94-C.E., dated 1st Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty leviable on like goods under section 3 of the Customs Tariff Act, 1975 (51 of 1975) equivalent to the duty of excise paid on such capital goods. Explanation. - For the purposes of this section, - (1) 'capital goods' means- (a) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products; (b) components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose; and (c) moulds and dies, generating sets and weigh-bridges used in the factory of the manufacturer. (1) 'specified duty' means duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue that the items were not 'Capital goods' within the meaning of terms as defined in Explanation (1). 4.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 if used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final product would be 'Capital goods', and, therefore, qualify for availing Modvat credit. Per clause (b), the components, spare parts and accessories of the goods mentioned in clause (a) used for the purposes enumerated therein would also be 'Capital goods' and qualify for Modvat credit entitlement. Clause (c) makes moulds and dies, generating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manufacture of fertilizers and not that it should be used directly in the manufacture of fertilizers. The Court said that : "The exemption notification must be so construed as to give due weight to the liberal language it uses. The ammonia used in the water treatment, steam generation and inert gas generation plants, which are a necessary part of the process of manufacturing urea, must, therefore, be held to be used in the manufacture of ammonia and the raw naphtha used for the manufacture thereof is entitled to the duty exemption." 6.The contention of learned Additional Solicitor General that the aforesaid decision and other decisions referred by the Tribunal in the impugned order were cases involving sales tax and income tax and, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the authorities that an item does not satisfy the requirement of 'Capital goods' within the meaning of the Rule on the ground of its user as it now sought to be urged by the learned counsel. The case of the revenue has all through been that the items in question per se are not 'Capital goods' within the meaning of the expression as defined in Explanation 1(a). In respect of the cables of which Mr. Rohtagi gave example, the stand of the revenue before the Tribunal was that the cables per se cannot be treated as 'Capital goods'. The stand of the revenue was not as has been projected now by Mr. Rohtagi. In this view, the question of directing remand of these matters for fresh decision by the Tribunal does not arise. On the facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X
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