2004 (10) TMI 416 - AT - Central Excise

Summary

Issues:
1. Eligibility of capital goods credit under Rule 57Q for a loader classified under heading 84.29.

Analysis:
The judgment revolves around the eligibility of capital goods credit under Rule 57Q for a loader classified under heading 84.29. The original authority disallowed the credit, stating that goods under heading 84.29 were not eligible for capital goods credit. The appellant challenged this decision, arguing that the loader was a material-handling equipment falling under heading 84.28, making it eligible for credit. The Commissioner (Appeals) accepted this argument, allowing the credit and leading to the Revenue's appeal.

Upon hearing both sides, the main contention raised by the appellant was that the classification by the manufacturer determines the eligibility for Modvat Credit under Rule 57Q. The manufacturer classified the loader under heading 84.29, and the appellant argued that this classification cannot be changed by the buyer. However, the respondent's counsel contended, based on case law, that if the capital goods are material-handling equipment, they fall under heading 84.28, entitling them to the benefit of Modvat Credit.

The judge, after examining the tariff entries for headings 84.28 and 84.29, noted that material-handling equipment, including loading machinery, is generally covered under heading 84.28. The specific mention of "Shovel Loaders" under heading 84.29 indicated that only such loaders fell under that heading during the relevant period. Since the appellant did not claim that the loader in question was a shovel loader, it was considered a general loading equipment falling under heading 84.28. Capital goods falling under this heading were eligible for Modvat Credit at that time, making the acceptance of the loader as a material-handling equipment under heading 84.28 justifiable.

Consequently, the Revenue's appeal was deemed unsuccessful, and the judgment dismissed the appeal, upholding the decision that the loader was eligible for capital goods credit under Rule 57Q as a material-handling equipment falling under heading 84.28.