THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N.RAVI SHANKAR. C.E.A.No. 99 of 2011. ORDER: (Per Goda Raghuram, J) This is an appeal by Revenue under Section 35-G of the Central Excise Act, 1954 against the order dt. 15.9.2010 of the Customs, Excise & Service Tax Appellate Tribunal South Zonal Bench, Bangalore. The appeal of the Revenue was dismissed. The respondent company has Central Excise Registration and is a manufacturer of Sea Water Magnesia. During the initial establishment of the factory, the assessee had taken modvat credit on certain items and declared them as ‘capital goods’ in terms of Rule 57 Q of the Central Excise Rules, 1944. The assessee received goods from 1995 onwards but made relevant entries of receipt only in March, 1998 for all the capital goods received into the factory from January, 1995 to March, 1998. Initially, Explanation-I to Rule 57 Q of the Central Excise Rules, 1944 (prior to its amendment vide Notification No. 14/96 dt. 23.7.1996), defined ‘capital goods’ to mean: a) Machines, Machinery, Plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products. b) Components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purpose; and c) Moulds and dies, generating sets and weigh bridges used in the factory of the manufacturer. After the notification dt. 23.7.1996, clauses (f) and (g) were added to the Explanation-I to Rule 57-Q whereby refectories and refractory material and steel tubes and pipes were also enumerated as ‘capital goods’. On an assumption that the assessee availed modvat credit irregularly on ‘capital goods’ during March, 1998, in contravention of the Rules, a show cause notice dt. 10.9.1998 was issued proposing to disallow modvat credit and proposing recovery of extra credit taken and for penalty. Eventually, the adjudicating authority vide the order dt. 5.4.2002 disallowed the credit of Rs. 10,22,43,204/- allowed credit of Rs. 4,34,02,167/- and imposed penalty of Rs. 40 lakhs. On appeal by the assessee, the Commissioner of Appeals vide order dt. 25.1.2007 allowed modvat credit availed on Steel tubes and refractories received prior to 23.7.1996 and on the Steel tubes installed in the assessee’s jetty prior to 23.7.1996. Aggrieved, the revenue preferred an appeal to the Tribunal, which was rejected by the impugned order. A concurrent finding on interpretation of the relevant rules by the Commissioner of Appeals and the Tribunal is that the goods in question are covered by clauses a, b and c of the Explanation-I to Rule 57 Q of the Central Excise Rules, 1944 and that though the amendment to the explanation was by the notification dt. 23.7.1996, ‘capital goods’ were already covered by clauses a to c; steel pipes and tubes fall to be characterized as ‘capital goods’ and are entitled to modvat credit even though they were purchased or incorporated prior to 23.7.1996. On a careful consideration of the orders of the Commissioner of Appeals and the Tribunal, we find no error or perversity in the impugned order warranting interference in this appeal. The appeal is devoid of merits and the same is dismissed, at the stage of admission. There shall however be no costs. ______________________ GODA RAGHURAM, J _______________________ N.RAVI SHANKAR, J 12.10.2011. KRB. THE HON’BLE SRI JUSTICE GODA RAGHURAM AND THE HON’BLE SRI JUSTICE N.RAVI SHANKAR. C.E.A.No. 99 of 2011. ORDER: (Per Goda Raghuram, J) Dt. 12.10.2011.