Per Jyoti Balasundaram :

The Revenue is aggrieved by the order of the Commissioner of Central Excise (Appeals), Ghaziabad who has held that the respondents herein, manufacturers of paper and paper board, are eligible to capital goods credit on the following items:

1. Electrostatic precipitator

2. Conveyor belt for coal and pay loader of coal

3. Chain hoist equipments and chains

4. Electric wire and cables

5. Auto manual station

6. Pin and spare of pins

7. Booster

8. CPU 100 module

2. We have heard Shri Panchatcharan, learned DR and Shri M.P. Devnath, learned Counsel. Our findings are recorded as under:

3.1Electrostatic Precipitator

This item has been installed along with the coal fired boiler, which is used for generation of steam, which is essential for manufacture of paper and which is used for collection and safe disposal of dust ash and flue gases. It is in the nature of pollution control equipment. It has already been held that pollution control equipments are to be treated as machine or machinery used for producing or processing of goods for manufacture of final product and hence we hold that capital goods credit is available on this item.

3.2Conveyor Belt for coal and pay loader of coal

This is in the nature of material handling equipment for transportation of coal from coal yard to coal fired boiler and is entitled to capital goods credit in view of the decisions of the Tribunal holding that material handling equipment is covered by the definition of capital goods within the meaning of Rule 57Q.

3.3Chain Hoist Equipments and Chains

Chain hoist equipments and chains are used for feeding coal to coal fire boiler, loading of paper from bonded store room to trucks and shifting of paper reels and reems in the godown. They are also in the nature of material handling equipment and hence entitled to capital goods credit.

3.4Electric wires and cables:

These are used for carrying of electricity from one section to another is eligible to capital goods credit in view of the Larger Bench decision in the case of Jawahar Mills Ltd. Vs. Collector of Central Excise reported in 1999 (32) RLT 379.

3.5Auto Manual Station

This is a type of instrument installed on coal fired boiler for controlling water level in the boiler. Control of water level is necessary to control level of feed water which is very essential for safe operation of the boiler and hence to be treated as capital goods under clause 1 (b) of Explanation to Rule 57Q and is eligible to credit thereunder.

3.6Pin spare of pins

These are spare parts of pay loader of coal covered by item 2 and are hence covered by clause (b) of the explanation to Rule 57Q.

3.7Booster

Booster is a component of pollution control equipment. We have already held that pollution control equipment is entitled to capital goods credit; component of such equipment is covered by clause 1 (b) of explanation to Rule 57Q and is eligible to credit.

3.8CPU 100 Module

This is a component of soot blower which is an accessory of a boiler and a soot blower is used for cleaning the boiler. Cleaning of boiler increases its efficiency. Since the boiler is used for producing the final products, soot blowers are to be regarded as used for producing or processing goods and the item in question being a component of soot blowers, it is covered by clause 1 (b) of explanation to Rule 57Q and hence eligible for capital goods credit.

4. In the result, we hold that credit is admissible on all the 8 items in dispute, uphold the impugned order and reject the appeal of the Revenue.