NAVA BHARAT FERRO ALLOYS LTD. Vs. COMMISSIONER OF C. EX., HYDERABAD

JUDGEMENT

(1.) HEARD both sides.

(2.) SHRI B. Seshagiri Rao, Consultant, appearing for the appellants pleaded that the appellants are manufacturers of ferro alloys and are availing credit of duty paid on capital goods under Rule 57Q of Central Excise Rules after filing declaration under Rule 57T of Central Excise Rules, 1944. They were taking Modvat credit on coal bunkers and its parts with accessories, chequered plates/ hard plates falling under sub -heading No. 7326.90 and 7208.11 respectively. He pleaded that the Commissioner (Appeals) has denied the credit on the ground that coal bunkers are used in boilers for temporary storage of crushed coal. This does not make the coal bunkers as parts of boilers or parts of power plant. Hence coal bunkers cannot be considered as component parts of boiler/power pants and hence are ineligible to the Modvat credit under Rule 57Q. Since the coal bunkers have been held to be ineligible to Modvat credit its parts and accessories will also be ineligible to Modvat credit. Regarding chequered plates/hard plates, the Commissioner gave a finding that these are general purpose items having multifarious uses. These are not identified in commercial trade parlance as components/spares or accessories of the machinery. He pleaded that coal bunkers and parts with accessories were used as boiler parts for temporary storage of crushed coal and these are located in the boilers. The CBEC under Circular No. 276/110/96 -TRU, dated 2 -12 -1996 has clarified that spares components and accessories used in capital goods are eligible for the purpose of Modvat credit irrespective of their classification. The steam produced in the boiler is used for operation of power plant. Power plant falls under sub -heading 85.02 and parts and accessories and component parts of capital goods listed under Rule 57Q are eligible for Modvat credit. He relied on the following decisions - 1. CCE, Meerut v Triveni Engineering Works Ltd., 1997 (96) E.L.T. 655 (T) where it was held that boiler is to be considered as capital goods even prior to its specification under Rule 57Q with effect from 16 -3 -95. Therefore, parts of boilers would be held as eligible to credit. 2. CCE, Coimbatore v. Southern Iron and Steel Co. [2000 (121) E.L.T. 164 (T) = 2000 (92) ECR 588 (T)] where it was held that blower, boiler, power plant parts and accessories, the issue is not regarding availability of Modvat credit on the plant itself but only on the connected equipment parts and accessories etc. These were required for proper function after erection and commissioning of power plant and the blower housed it in turn were a part of the plant situated within the factory premises which produced the final product.

(3.) CCE , Meerut v. Salora International Ltd., [2001 (94) ECR 79 (T)] where it was held that plastic racks are explained as storing devices fitted with conveyor system. Earlier decision of the Tribunal allowing credit on conveyor system applicable to this item.