AGARWAL SHRAFF & CO 153/5 A.P.C.

Road
CHARTERED ACCOUNTANTS Calcutta- 700 006
Phone- No. – 555 8820
e-mail – shraff @ cal2.vsnl.net.in
Mobile- 98300 70510 ( Vinay)
98300 96097 ( Sanjay)

Mr. Trilok Singh May 2, 2000

Bharat Calciners Limited
Calcutta

Sir,
As desired by you we are submitting our pointwise opinion on the queries regarding admissibility of the
modvat on several capital goods not permitted by Assistant Commissioner.

Query1 – Whether modvat is available on Pipe & Tube, Payloader, Welding Electrode, PVC insulated Electric
Cable?

Opinion
A) Pipe & Tube – There are a number of Tribunal’s decisions in which it has been held that if the pipes are
used for conveying the material which is used in the process of manufacture then they are capital goods. In our
case it has been used for fabrication of water spraying arrangement in cooler which is as production equipment.
so it should be eligible to avail modvat credit as capital goods.
The above contention is supported by decision in CCE, Meerut Vs. Gangeshwar Limited, 2000(115) E.L.T. 653
( Tribunal) wherein modvat credit, on pipes and pipe fittings used for conveying the steam which in turn is used
for moving the turbine for generation of electricity, is allowed.

B) Payloader – Material handling Equipment’s are eligible Capital Goods for modvat credit. In our case since
Payloader are used for handling raw material it is eligible for modvat credit.
The above contention is supported by decision in ACC Ltd. vs. CCE, Raipur, 1999 (108) ELT 169 ( Tribunal)
wherein modvat credit on Dumper and Loader used inside cement factory as material handling equipment is
allowed.

C) Welding Electrode - Welding electrode being used for fabrication of the rotary kiln cooler and other
production machinery are eligible for modvat credit.
It has been decided in the case of CCE, Meerut Vs. K.L.Steel Limited, 1999 (111) ELT 608 (Tribunal) that
Welding Electrodes are eligible capital goods for modvat credit.

D) PVC Insulated Electric Cable - Electrical wires and cables used for carrying electricity from one section
to other are eligible for modvat credit.
The above is supported by decision in the case of CCE, Meerut vs. Star Paper Mills Ltd.

Query2 – As the eligibility of above items to avail modvat credit was rejected by Assistant Commissioner on
the face of Declarations itself filed on 15/5/96, 25/2/95, 22/11/94, 22/3/96, can we now file appeal against the
above order.

Opinion
As no quasi judicial order was passed by AC to reject our claim for availing modvat credit, it was not an
appealable order to file appeal to Commissioner (Appeal), hence the limitation of filing appeal within 3 month
of the order is not applicable to our case. As order passed was merely an administrative order we can pray to
our jurisdictional commissioner to give a proper order.