Per G.R. Sharma :

The ld. Commissioner in the impugned order held that :

"The modvat credit taken during the months April to August, 1994 is allowed under Rule 57Q on capital goods namely, Hopper Top/Hopper Feeder/Gear Machinery Coupling/Flow Control Diaphragm/Gear Ring/Bag Divertors/Kiln Thrust Roller Housing Bearing/Bracket/Allen Max Helical Gear/Coupling Tyre/Screen Drum Assembly/Proportioning System/Group rate control system/Assembly of outlet conc/inlet conc/plain mill head/Assembly of drive shaft & pinion/Solenoid valve/Grinding Media Balls outlet Diaphragm segment/Hard steel lining plate/Clinker/Gypsum-Pozzalana weigh-feeder. Modvat credit in respect of other goods in RG. 23 C Part I during the month of April, 1994 to August, 1994 is disallowed. Credit wrongly utilised, if any, should recovered forthwith from the noticee under Rule 57U of Central Excise Rules, 1944."

2. The facts of the case in brief are that the Appellant manufactures cement. They claimed modvat credit on certain items claiming them to be capital goods. The Department issued two Show Cause Notices alleging that the goods were not capital goods and, therefore, were not eligible for modvat credit under Rule 57Q. In reply to the show cause notice, the appellants submitted that their claim of modvat credit as capital goods on the items under Rule 57Q is permitted by the Explanation under Rule 57Q; that they filed the declaration in the prescribed format; that in the declaration, the precise function of the goods was indicated; that there were a catena of judgements wherein the meaning of the word 'Plant and Machinery' is set out; that it includes all items such as machinery cables, accessories and so on. After careful consideration of the submissions made before the Commissioner, he held as indicated in the preceding paragraph and hence this appeal before us.

3. Shri S. Grover, the ld. Advocate appearing for the appellant, submitted that modvat credit has been denied on a number of items which are nothing but part and equipment of plant and machinery. He submitted a technical write-up on the function of the items and prayed that the appeal may be allowed.

4. Shri P.K. Jain, the ld. SDR, submitted that the goods are not specifically covered by the Explanation under Rule 57Q. He submitted that the ld. Commissioner has dealt with each item carefully. He, reiterating the findings of the ld. Commissioner, prays that the impugned order may be upheld.

5. Heard the submissions of both sides. Instead of making general observation, we deal with the items specifically hereunder:

A. FIRE BRICKS AND REFRACTORIES, LINING PLATE/LINERS.

Fire bricks are used in kiln and its auxiliary units. Brick lining is essential for the Kiln operation and fire bricks are lined inside the kiln. The ld. Counsel submitted that their case is covered by the decision of this Tribunal in the case of Rathi Ispat Limited reported in 1997 (93) ELT 532 and also in the case of Nova Udyog Limited reported in 1996 (88) ELT 532. He submitted that this Tribunal had held that modvat credit is not restricted to machinery which brings about changes but is also available for parts, accessories of machinery/appliances used for manufacture of the final product. We have considered the submissions. We have also perused the case law. We hold that Refractory material including Fire Bricks, Lining plate/Liners, Refractories are eligible to the benefit of modvat credit.

B. HAMMER PLANE RING & HAMMER FOR CLINKER BREAKER.

Hammer is used to bring down the large size of clinker into smaller size for smooth grinding of cement. Hammer plane ring is used in coal mill for crushing coal. Looking to the function of these items, we find that they are parts-cum-accessories of machine/plant and are, therefore, covered by this Tribunal's decision in the case of Nova Udyog Limited cited above and also in the case of M/s. Modi Xerox Ltd. reported in 1996 (88) ELT 530.

C. CONVEYOR BELT.

Cement manufacture starts from crushing of Lime St