Per Shri T.P. Nambiar :

This is an appeal filed by the appellants against the orders passed by the Commissioner (Appeals), Trichy. This present appeal relates to the dispute in availment of MODVAT credit of capital goods in terms of rule 57Q. The Commissioner (Appeals) did not allow the MODVAT credit with respect to Electrical Wires Cables.

2. The Ld. advocate Shri T.Ramesh appearing for the appellants pointed out that in the following decisions the tribunal had granted the MODVAT credit under rule 57Q of the Central Excise Rules, 1944 in regard to Cables and Wires:-

1) 1997 (96) ELT 354 - Grasim Cement Vs. CCE, Raipur

2) 1997 (96) ELT 404 - Modern Petrofiles, CCE Baroda

3) 1997 (95) ELT 301 - Konoria Chemicals Inds. Ltd. Vs. CCE Allahabad

4) 1997 (95) ELT 655 - Century Cement Ltd. Vs CCE, Raipur

3. In all the above cited decisions, he pointed out that the tribunal had granted the MODVAT credit under rule 57Q of the C.E. Rules 1944 with respect to Electrical Wires Cables.

4. But the Ld. JDR Shri S. Murugandy pointed out that this bench of the tribunal did not grant benefit of MODVAT credit under rule 57Q of the Central Excise Rules, 1944 with respect to the Wires and Cables. In this connection he relied on the decision of this bench in order No. 939/1997 dt. 4.4.97 where in at para 2 3, the tribunal held as follows:-

2. The learned Consultant for the appellants at the outset conceded the plea of the revenue in the case of Room Airconditioners figuring at Sl.No. (iv). The plea regarding the eligibility or otherwise in respect of the various items are as under:

Electrical Wires and Cables

The learned JDR has pleaded that the Tribunal in its order in the case of SIV Industries vide order No. 646/96 dated 16.04.96 has held that the wires and cables which are used for transmission of electricity would not be eligible to the benefit of MODVAT credit. The learned Consultant for the respondents has pleaded that subsequently they have been included by amendment in the definition of the capital goods as eligible capital goods and has pleaded that this amendment should be taken as clarificatory in nature.

3. We have considered the pleas made by both the sides. We observe that in our order No. 646/96 dated 16.4.96 in para 4 we have held as under:

I observe that the scope of the term capital goods has been set out by way of definition in the explanation to Rule 57Q, the main provisions under which the MODVAT credit in respect of capital goods has been allowed. This definition as would be seen from the above cannot be taken to cover electric cables of the type referred to in the impugned order. The learned lower authority has not entered any finding as to whether this item would constitute a component or accessory of the capital goods as set out in the definition given above. Rule 57S only provides for the manner of utilisation of capital goods and the credit allowed in respect of the duty paid thereon. It does not in any way enlarge the scope of the definition capital goods for MODVAT purposes. For an input to qualify as capital goods it should specifically satisfy the definition of capital goods as set out in the explanation to Rule 57Q. This in my view is not specified in the present case.

We have taken into consideration the scope of the definition of capital goods under Rule 57Q before holding that the MODVAT credit in respect of these would not be available. The amendment made subsequently provides for a substantive modification of the Rule and it is only by a specific mention the cables and wires can be taken to have been included while earlier the Rule 57Q was not covering the same. We, therefore, hold that there is a force in the plea of the Revenue and we are of the view that MODVAT credit could not have been allowed in respect of these items. The pleas of the revenue so far as the wires and cables are concerned are allowed."

5. I have considered the submissions. It is now seen that there is a conflict of decisions in this regar