1 D.B. CENTRAL EXCISE APPEAL NO.9/2005 The Union of India Vs. M/s Guljag Industries Ltd. & Anr. Date : 02.01.2007 PRESENT HON'BLE MR. JUSTICE RAJESH BALIA HON'BLE MR. JUSTICE CHATRA RAM JAT Mr. Ravi Bhansali for the appellant. Mr. Dinesh Mehta for the respondents. ________ Heard learned counsel for the parties. The following substantial question of law has been raised for decision in this appeal by the revenue:- “Whether the asbestos gasket sheets used by the assessee-respondent for connecting various equipments through which the process of gas and steam passes, is eligible for modvat credit to be availed by the assessed as an input as defined under Rule 2(f) of the Cenvat Credit Rules, 2001 or a capital goods in terms of Rule 2(b) of the said Rules?” The Asbestos Gasket Sheet in respect of 2 which the assessee has availed cenvat credit of Duty paid on such Asbestos Gsket Sheets is used by the assessee respondent for connecting various equipments through which the process of gas and steam passes. The Adjudicating Authority has dis-allowed the assessee's claim to cenvat credit inter alia on the ground that the asbestos gasket sheets are not included in scheme enumerated in capital goods described in clause (a) of Rule 2 of Cenvat Credit Rules, 2001 whereas the assessee has claimed that the asbestos gasket sheets are being used for connecting various equipments through which the process of gas and steam passes and are, therefore, necessary accessories of the principal plant for manufacture of gas and steam and are eligible for availing modvat credit in terms of Clause (ii) of Rule 2 of Cenvat Credit Rules, 2001. The adjudicating authority after show cause notice issued to the respondent manufacturer had disallowed the cenvat credit which order was affirmed by the Commissioner (Appeals) vide Annex.2 dated 3 13.5.2005. However, the Tribunal vide its order dated 16.9.2003 has allowed the claim of the assessee to avail cenvat credit of Duties paid in respect of aforesaid items. The learned counsel for the parties have placed before us the decision of this Court rendered in D.B. Civil Appeal No.8/2006 – The Union of India Vs. M/s Grasim Industries Ltd. & Anr. and the decision rendered in Union of India Vs. M/s Aditya Cement & Anr. 2006(3) WLC (Raj.) 335. Ratio emerging from the above decisions case be culled out as under:- “Obviously, the accessories which have not directly been involved with the primary function of machine of which it is an accessory that is to say direct involvement in the primary functioning of machine is not the necessary requirement of capital goods to be eligible for modvat credit if it falls within clauses (b), (c) or (d) of Explanation 1. It may be assumed that for the purpose of clause (a) such machines which are primarily involved 4 in manufacturing are included in the capital goods but if we come to clause (b) which includes components, spare parts and accessories to such machines appliance its tools etc. which are enumerated in clause (a) and which are used for the purpose of manufacturing mentioned in clause (b) that accessories of machine must be of such machines which are used in manufacturing and processing of the goods or are used for making change in the goods. It cannot be gainsaid that where there is a plant and machinery with which activity of manufacturing is going on, the principal plant and machinery suffers wear and tear in the course of its operation and requires regular back up through proper up-keep and normal maintenance for which the supplementary and subordinate machinery are required to be kept at site.” In the present case, from the finding recorded by the Tribunal, it is apparent that asbestos gasket sheets are used for the passage of gas and steam manufactured in the assessee's plant. Apparently, the user is essential and adjunct to the main plant and must fall in the same domain of accessories necessary for 5 smooth running of the plant. Consequently, applying the ratio laid down in aforesaid two decisions, this appeal must fail, affirming the decision of the Tribunal. Accordingly, this appeal is dismissed. No order as to costs. [CHATRA RAM JAT], J. [ RAJESH BALIA ], J. babulal/