G.M. Akbar Ali, J.@mdashAppeal is filed against the order dated of the Customs, Excise and Service Tax Appellate Tribunal, Chennai, in Final Order No. 570 of 2006. The 1st respondent/assessee was engaged in manufacturing of PVC resins and were availing MODVAT credit under Rule 57Q of the Central Excise Rules 1944 (hereinafter referred as "Rules"). The assessee has taken such MODVAT credit of duty paid on capital goods used as construction materials/measuring equipments/pipes and equipments/tubes/flanges/bolts and nuts/Valves/Gauges/Pressure Gauge/Indicator/Fork lift/Gear boxes/shafts/bearings/paints which were used in the manufacture of final product. According to the Revenue, the above said goods do not either bring about any change in the manufacture of final product or used for producing or processing exercisable finished products. Therefore, a show cause noticed dated 24.10.1995 was issued as to why the irregular availment of MODVAT credit of Rs. 9,74,430/- should not be disallowed under the Rules.
2. The assessee replied by stating that the above goods are capital goods within the meaning of Rule 57Q and stated that they are eligible for such credit. However, the original authority found that the goods are not capital goods used in manufacturing the final products and disallowed the credit.
3. An appeal was preferred against the order before the Commissioner of Appeals. The Commissioner of Appeals partially allowed the appeal by stating that some of the goods are capital goods and some of the goods are not capital goods. The assessee preferred further appeal before the Tribunal on the goods which were not admitted as capital goods for the periods prior to 16.3.1995 as Rule 57Q came into force wef 16/3/1995.
4. The Tribunal analysed every category of goods and found that except an Aluminium catalyst used in R & D department, other goods are capital goods, thereby allowed the appeals except in respect above said Aluminium catalyst. Aggrieved by which, the Revenue is before this court on the ground that the Tribunal''s order allowing the credit on the above said goods are not acceptable since these items are not specified goods under Rule 57Q of the Central Excise Rule.
5. On admission, the following substantial questions of law is framed:
"Whether the Tribunal is correct in allowing Modvat credit in respect of iron and Steel products falling under Chapter 73 inasmuch as these items are not specified goods under Rule 57Q of erstwhile Central Excise Rules 1944 and are used as structural support to plant and machinery?"
6. When the matter was taken up today, there is no representation of the appellant/Revenue.
7. Heard Mrs. Mythili for the 1st respondent/Assessee.
8. The learned counsel for the assessee submitted that this court has already considered a similar issue in C.M.A. 1301/2005 dated 31.12.2012 and in C.M.A. No. 1265/2014 dated 10/7/2014 and allowed the credit. This court, while considering Rule 57Q of the Central Excise Rules, regarding the goods used as structural support to the plant and machinery, placed reliance on the decision reported in CCE v. Rajasthan Spg. & Wvg. Mills Ltd. [2010] 27 STT 451, wherein the Apex Court has rejected the plea of the Revenue while considering the components/parts with reference to the particular industry in question.
9. The Tribunal has considered the components/parts individually and has found that they are the parts/components falling under the capital goods under 57Q of the Rules. The Tribunal has even considered welding wire used for joining process and held to be eligible for input duty credit under Rule 57A of the Rules. The Tribunal extended such allowance though the declaration was filed under Rule 57Q placing reliance in CC & CE v. Modi Rubber Ltd. 2000 (119) ELT 197 (Trib. - New Delhi) (LB).
10. The grievance of the Revenue is that many of the goods are not specified for capital goods under Rule 57Q during the relevant period. However, the substantial question of law raised is whether the Tribunal is correct in allowing MODVAT credit in respect of iron and steel products falling under Chapter 73 which are used as structural support to plant and machinery. The said question was considered by us in C.M.A. No. 1265 of 2014 by order dated 10.7.2014. Reliance was placed in Rajasthan Spg. & Wvg. Mills Ltd. (supra), wherein the Apex Court has applied the user test in a case of M.S. Angles, Beams and Channels used in the erection of machineries and held that it would become component of the same. Therefore, we are of the considered view that credit cannot be denied on the ground that the goods are not covered under the definition of capital goods under Rule 57Q as it stood before 16.3.1995.
11. The case on hand is squarely covered by the decision in Rajasthan Spg. & Wvg. Mills Ltd. (supra), and the goods used by the assessee are falling under the capital goods, eligible for credit. For the reasons stated above, the appeal fails and the questions of law is answered in favour of assessee and the appeal is dismissed. No costs.
