2006 (5) TMI 510 - AT - Central Excise

Summary

Issues:
Modvat credit denial on Ship Unloader as Capital Goods due to distance from factory.

Analysis:
The appeals arose from an OIO denying modvat credit on Ship Unloader, categorized as Capital Goods, installed in the wharf area. The appellants argued that the item was essential for transporting inputs from ships to the factory, emphasizing its sole use as Capital Goods. The Counsel cited the Apex court's ruling in Vikram Cement case, asserting eligibility for modvat credit for Capital Goods crucial in the manufacturing process. Additionally, reliance was placed on various judgments supporting the Capital Goods' modvat credit eligibility.

The learned Counsel highlighted the relevance of the Apex court's judgment in Vikram Cement case and several other citations, emphasizing the necessity of Capital Goods for manufacturing processes. The Tribunal's decision in Finolex Industries Ltd. case further supported extending modvat credit to ship unloaders in wharf areas. The Tribunal concluded that without the Capital Goods like the Ship Unloader, inputs could not reach the factory, justifying the appellants' eligibility for modvat credit. Consequently, the impugned order was set aside, and the appeals were allowed with potential consequential relief, while the penalty in one appeal was also set aside.