[Order]. - This is an appeal against the disallowance of Modvat credit on joints, channels, angles, rolled and S.S. welded tubes, M.S. angles and plates, H.R. plates and shape and sections, chequered plates and ITR plates.
2. The facts of the case are that the appellants manufacture sugar. They have been availing Modvat credit on a number of items as capital goods. The Revenue alleged that Modvat credit was not available on certain items as they were not used in the manufacture or processing or bringing about any change in the final products and, therefore Modvat credit has wrongly been taken on the above items. In reply to the SCN, the appellants submitted that the joints, channels, angles and M.S. Beams are used in fabricating supporting structures for installation of equipments such as vacuum pan, crystallizers, sugar grader, elevator, at required heights; that H.R. plates are black steel sheets which are used at the place where the temperature remains substantially high; that these items are used in boiler of sugar plant; that the M.S. bars, shapes and sections are used for erection of new cooling tower; that the chequered plates and ITR plates are used to construct the platforms on which equipment is installed; that the cane carrier chain and spares are used to transfer the raw material/semi-processed material etc. from one stage to the other. They, therefore submitted that the function and use of the items and location of part, they are nothing but parts and components of the plants. They thus, submitted that since they are parts or components of plant, therefore in terms of Rule 57Q, they are capital goods. The Asstt. Commissioner having regard to the use of the items allowed Modvat cdredit on certain items but disallowed Modvat credit on other items. The items on which Modvat credit was disallowed were joints, channels, angles, rolled and welded pipe, S.S. welded tubes, M.S. angles, M.S. plates, H.R. plates black steel tubes, shapes and sections, chequered plates and ITR plates, cane carrier chain and spares thereof. The Commissioner (A) in the impugned order held that “There is force in the Department’s appeal that joint, channels, angles, rolled and welded pipes, S.S. welded tubes, M.S. angles and plates, H.R. plates and shapes and sections, chequered plates and ITR plates cannot be considered as capital goods under Rule 57Q because they are components for supporting structure for installation of equipment and not components of the capital goods. So the Modvat credit on these items shall not be admissible to the respondents. However, the Department’s appeal is not forceful or acceptable in respect of cane carrier chain and spares thereof, nickle screens, steel trash plates and boiler accessories. These items can be considered as capital goods as components of “sugar manufacturing plant and machinery.” Against these findings, the appellants have preferred the captioned appeal.
3. Shri Kawaljit Singh, ld. Advocate submits that all the items except shapes and sections are covered by the decision of this Tribunal in their own case. Shri Y.R. Kilaniya, ld. JDR pointed out that the Tribunal in the case of Malvika Steel Limited [] took a different view. Ld. Counsel submits that the Malvika Steel Limited’s case was considered by the Tribunal in their own case in Tribunal’s Order Nos. A/776-777/98-NB, dt. 8-9-1998. He, therefore prays that the appeal may be allowed.
4. Ld. JDR submits that the authorities below have examined each and every items and looking to the location and the use of the items came to the conclusion that certain items indicated in the order of the Commissioner (Appeals) had no relation with the components and parts or accessories and, therefore were not covered by the explanation to Rule 57Q. He refers to the judgment of this Tribunal in the case of Malvika Steel and stated that the most of the items disallowed by the Commissioner (Appeals) are the same as those disallowed in the case of Malvika Steel Limited. He therefore prays that the appeal may be rejected.
5. Heard the rival submissions. I find that in the case of Malvika Steel Limited, there is a finding that the items were used as building material of the plant. If the items are used in the construction of the wall or any part of the plant structure as construction material that part has been disallowed. However, if the same material is used for raising structure to support the various machines parts of machine then they will be covered by the explanation to Rule 57Q. Plant no doubt has wide connotation and covers not only machine, machinery, equipment, parts, accessories and components but also the permanent structure in the form of walls etc. Therefore reading down independent explanation given under Rule 57Q, we have to see whether the items claimed as components and accessories are actually components and accessories and other materials used in the manufacture of machine, machinery, equipment, apparatus, etc. In the instant case, the use of the material is more like the one dealt with in their own case of the appellants. I therefore follow the decision of this Tribunal in the case of the appellants themselves and hold that Modvat credit will be admissible on all the items listed in the order passed by the Commissioner (Appeals) except M.S. sections and M.S. shapes. The appeal is, therefore, disposed of in the above terms.