2001 (12) TMI 737 - AT - Central Excise

Summary

Issues Involved:
The issue involves whether dumpers used for transporting raw materials from a mine to a factory are eligible as capital goods under Rule 57Q to avail Modvat credit.

Summary:
The appeal concerns the eligibility of dumpers as capital goods under Rule 57Q to avail Modvat credit. The Appellant argues that dumpers are integral to the manufacturing process as they transport raw materials from the mine to the factory, a preliminary operation necessary for manufacturing. Citing a previous Tribunal decision, the Appellant contends that dumpers used for material handling are eligible as capital goods. However, the Revenue argues that the dumpers were not used within the factory premises, relying on previous Tribunal decisions that specify goods must be used in the factory of manufacture to avail credit as capital goods.

Upon careful consideration, the Tribunal finds that the transfer of raw materials by dumpers is an integral part of the manufacturing process, essential for the production of a commercially different article. Previous judgments support the eligibility of material handling equipment, including dumpers, for Modvat credit under Rule 57Q. The Tribunal notes that the denial of Modvat credit was based on the grounds of the goods not being used in relation to the manufacture of the final product, without specifically charging that the dumpers were not used in the factory. As the dumpers were used in relation to the manufacturing process, the Tribunal allows the appeal, finding no justification to disallow Modvat credit on dumpers.

Therefore, the Tribunal allows the appeal, holding that dumpers used for transporting raw materials from the mine to the factory are eligible as capital goods under Rule 57Q to avail Modvat credit.