2005 (6) TMI 487 - AT - Central Excise

Summary

Issues: Appeal against Order-in Appeal allowing Modvat credit for Lathe Machine, welding machine, drilling machine, and Lighting arrestor. Contention on admissibility of credit for these items.

Analysis:
1. Lathe Machine: The Revenue contended that the Tribunal previously held that credit for Lathe Machine as capital goods is not admissible. However, the respondent argued that during the disputed period, the Lathe machine falls under a specified category of goods used in the factory for the manufacture of the final product. The respondent highlighted that the previous case law referred to a different definition of capital goods, which excluded items like Lathe machines. The Tribunal found no issue with the respondent's claim and dismissed the appeal.

2. Welding Machine and Drilling Machine: The Revenue argued that since these machines were not used in or in relation to the manufacture of the final product, credit should not be available. However, the respondent pointed out that during the relevant period, the definition of capital goods included specified goods used in the factory for manufacturing. The Tribunal noted that the disputed machines fell under the specified goods mentioned in the table under the Central Excise Act, making them eligible for credit. Consequently, the appeal was dismissed.

3. Lighting Arrestor: The Revenue contended that a previous Tribunal decision stated that Modvat credit for Lighting arrestor as capital goods is not available. In response, the respondent emphasized that the Lighting arrestor was classifiable under a tariff heading covered in the specified goods used in the factory for manufacturing. The Tribunal upheld the respondent's argument, stating that the goods in question were covered under the definition of capital goods applicable during the disputed period. Therefore, the appeal was dismissed based on the eligibility of the Lighting arrestor for credit during that time frame.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue against the Order-in Appeal allowing Modvat credit for the Lathe Machine, welding machine, drilling machine, and Lighting arrestor. The decision was based on the eligibility of these items as capital goods under the definition applicable during the disputed period, as they were used in the factory for manufacturing the final product. The Tribunal found no fault in the respondent's claim and upheld the benefit of credit for the specified goods falling under the relevant tariff headings.