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TMI Blog2004 (10) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... odes on the ground that Welding Electrodes are not covered in the definition of capital goods. A penalty was also imposed on the appellants. The Asstt. Commissioner, Central Excise, Rampur disallowed the credit of Rs. 33,136.59 on Welding Electrodes and imposed an equal amount of penalty on the appellants. On appeal, the Commissioner (Appeals), Meerut-II upheld the order of the Asstt. Commissioner denying the credit but reduced the penalty to Rs. 15,000/-. He pleaded that Welding Electrodes are eligible for Cenvat credit as components of the appellants plant & machinery and are covered under Rule 57AA of the Central Excise Rules, 1944. He stated that components are used only as spare parts. He relied on the Board's Circular No. 276/10/96-CX., dated 2-12-96 wherein it was clarified that all parts, components, accessories which are to be used with capital goods, classifiable under any Chapter Heading are eligible for availment of Modvat credit. He relied on the following decisions :- (i) Jawahar Mills Ltd. v. CCE [1999 (108) E.L.T. 47 (LB)] (ii) CCE v. Jawahar Mills Ltd. [2001 (132) E.L.T. 3 (S.C.)] (iii) CCE v. K.L. Steels Ltd. [1999 (111) E.L.T. 608] (iv) CCE v. U.P. State Suga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccessories. Appeal No. E/82/04-NB(SM) : 4. In this case, credit was denied to the appellants on Welding Electrodes and winding wires under Rule 57Q/57AA on the ground that these are not specified capital goods and the wires are used in the repairing of Motors and Static Converters. 5. Shri Bipin Garg, Advocate appearing for the appellants pleaded that the Modvat credit on Winding Wires is available to them and he relied on the Tribunal's decision in case of CCE, Chandigarh v. Arihant Spinning Mill [2002 (147) E.L.T. 1181] which was upheld by the Supreme Court as reported in [2003 (151) E.L.T. A178]. Regarding Welding Electrodes, he reiterated the submissions already made by Shri Kapil Vaish in the above said appeal. 6. Shri V. Valte, SDR on behalf of the Revenue pleaded that Winding Wires are not components, spares and accessories of the capital goods as defined under the Rules and these can not be eligible for Modvat credit. He relied on the decision in the case of CCE, Noida v. D.S.M Ltd. [2003 (162) E.L.T. 987 (Tribunal - Delhi)]. Appeal No. E/83/2004-NB(SM) : 7. In this appeal, the appellants have challenged denial of Modvat credit on Welding Electrodes and Steel Flat Ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 7207.90, manufactured in an induction furnace unit, whether or not any other goods are produced in such induction furnace, and hot re-rolled products of non-alloy steel falling under sub-heading Nos. 7211.11, 7211.19, 7211.30, 7211.52, 7211.59, 7211.60, 7211.92, 7211.99, 7213.90, 7214.90, 7215.90, 7216.10 and 7216.90 on which duty is paid under section 3A of the Central Excise Act, 1944 (1 of 1944). 2. All goods falling under chapter 84 (other than internal combustion engines falling under heading No. 84.07 or 84.08 and of a kind used in motor vehicles, compressors falling under heading No. 84.14 and of a kind used in refrigerating and airconditioning appliances and machinery, heading or sub-heading Nos. 84.15, 85.18, 8422.10, 8424.10, fire extinguishers falling under sub-heading No. 8424.80, 8424.91, 8424.99, 84.29 to 84.37, 84.40, 84.50, 84.52, 84.69 to 84.73, 84.76, 84.78, expansion valves and solenoid valves falling under subheading No. 8481.10 of a kind used for refrigerating and air-conditioning appliances and machinery); 3. All goods falling under chapter 85 (other than those falling under heading Nos. 85.09 to 85.13, 85.16 to 85.31, 85.39 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal and the Supreme Court allowed the Modvat credit on Welding Electrodes on the basis of the definition of capital goods at the relevant time, which was much wider. At that time capital goods included (i) machine, 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 manufacture of final product and (ii) Components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purposes. No specific heading number of Central Excise Tariff Act was mentioned for capital goods at that time. The other cases relied upon by the appellants in their favour where the credit has been allowed on Welding Electrodes as capital goods were of that period when the definition of capital goods was much wider and covered by the decision of the Jawahar Mills case (supra). On the other hand, the Revenue has relied on those case laws which have considered the definition of capital goods as given in Table annexed to Rule 57Q(1) or as defined in Rule 57AA. I find that in the description of capital goods as specified in T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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