- (1.) By way of this reference, the tribunal has referred following issue for reference to this court:- "Whether electric distribution equipment such as transformers, cables, fuses and electric motors and parts which may not by themselves be used for producing or processing or for bringing about any change in 5 any substance in the manufacture of the final product but without which, having regard to the modern technology such production or processing of goods for manufacture of final product is not possible, are capital goods within the meaning of clause (a) to the Explanation of Rule 57Q as it stood at the relevant time."
(2.) Counsel for the respondent has contended and in view of the contentions raised before the tribunal in page no.7 which reads as under:- 1. As per the provisions of Rule 57Q (1) of Central Excise Rules, 1944 a manufacturer is entitled to avail modvat credit of specified duties paid on the capital goods used by such manufacturer in his factory. During 15 the relevant period, for the purpose of availment of modvat credit the "capital goods" were defined under explanation 1(a) to 1(e) under Rule 57Q(1) which did not cover transformer. 2. The meaning of capital goods as per Rule 57Q(1) of the Central Excise Rules, 1944 was restrictive and not exhaustive. The words used in explanation to Rule 57Q were manufacture of..............." and not "in or in relation to manufacture of" which suggest that capital goods or their accessories should have direct role in production process. This definition clearly excluded transformers from 'capital goods', since they were not used in the manufacture of final products, though it may be argued that those were used in relation to the manufacture of the final product. 5. While delivering the impugned final order of the Hon'ble Tribunal has solely relied upon a single member order of CEGAT, Northern Bench, New Delhi in the case of CCE Meerut v. Nav Bharat Paper Mills reported in 1996 (86) ELT 501 (T) . In the said order while giving the findings it was held that since the transformer had already been included as capital goods w.e.f. 16.3.1995 there was no logic in not treating it as capital goods and also held that the date of declaration of this it me was immaterial. In this connection there is no objection in accepting the is holding of the tribunal that the transformers were capital goods earlier to 16.3.1995 also. Also there is no doubt that capital goods always remain capital goods. But this theory does not apply in deciding the admissibility of such capital goods for availment of modvat credit. All capital goods were not eligible for modvat credit but only those capital goods which had been defined under Rule 57Q (1) itself as capital goods were eligible for availment of modvat credit. Whether a particular item was covered under the category of capital goods or not for the purpose of availment of modvat credit under Rule 57Q(1) had to be examined with reference to definition available in the said rule during the relevant period.
(3.) Counsel for the respondent has relied upon the following decisions:- Union of India v. M/s. Aditya Cement and Anr. reported in 2006 (3) WLC (Raj.) 335 ; Associated Cement Companies Ltd. v. COLLR. Of C.EX., Chandigarh reported in 1998 (97) E.L.T. 379 (Tribunal) ; S.R.F. Ltd. v. Collector of Central Excise, Jaipur reported in 1997 (96) E.L.T. 372 (Tribunal) ; Commissioner of Central Excise, Jaipur v. R.K. Marbies Ltd. reported in 1997(92) E.L.T 276 (Tribunal) and Collector of Central Excise, Meerut v. Nav Bharat Paper Mills reported in 1996 (86) E.L.T. 501 (Tribunal) .;