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2004 (10) TMI 463 - AT - Central Excise
Issues:
Challenge to disallowance of capital goods credit for items used in off-factory mines, Molykote, Grease Pump, Racks, Doors, Hydraulic Pump. Analysis: 1. The appeal challenged the disallowance of capital goods credit for items used in off-factory mines, specifically lime stone mines. The judgment referred to a Supreme Court decision in Jaypee Rewa Cement v. CCE, M.P., which established that capital goods used in off-factory mines are not eligible for Modvat credit under Rule 57Q. Consequently, the order disallowing the credit for items used in lime stone mines was affirmed. 2. Regarding the item 'Molykote,' the appellants argued that it was used in fixing and running 'O' Rings in Gensets in the cement factory. However, the judgment found that once the 'O' Rings were fixed, 'Molykote' no longer played a role in the cement manufacturing process. Therefore, the benefit of Modvat credit could not be extended to 'Molykote,' and the decision of the Commissioner (Appeals) was upheld. 3. The appellants accepted the decision of the Commissioner (Appeals) regarding the Grease Pump, leading to the affirmation of the decision disallowing the capital goods credit for this item. 4. Concerning Racks, Doors, and other items used as storage facilities for computer hardware and cables, it was determined that these items did not have an integral function in the cement manufacturing process. As a result, the Modvat credit was not applicable to these items, and the decision of the Commissioner (Appeals) was upheld. 5. The last item in question was the Hydraulic Pump, claimed to be used in 'poclain excavator shovels.' However, the function of these shovels in the manufacturing process was not clearly explained by the appellants. As a result, the denial of capital goods credit for the Hydraulic Pump was affirmed due to the lack of clarity on how the equipment was integral to the cement manufacturing process. Consequently, the appeal challenging the order of the Commissioner (Appeals) was dismissed.
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