2000 (3) TMI 1115 - AT - Central Excise

Summary

Issues: Appeal against Order allowing modvat credit on specific items under Rule 57Q of Central Excise Rules, 1944.

Analysis:
1. Interpretation of Provisions: The Revenue challenged the Order allowing modvat credit on items like Conveyor System, Testing Machines, Conductive Plastic Racks, and Overhead Bridge. The Department argued that these items do not contribute directly to production or processing of goods as required by the definition of Capital goods before an amendment in 1995. The Department contended that items covered by the amending Notification cannot be considered Capital goods before the said amendment date.

2. Respondent's Argument: The Respondent, represented by Shri Rajesh Kumar, asserted that the disputed items were crucial machinery used in the continuous manufacturing process of Television and Audio equipment. He highlighted the Commissioner (Appeals) findings that the 1995 Notification did not alter the scope of "machinery, equipment, and apparatus." The Respondent emphasized the indispensability of the items for their manufacturing process.

3. Tribunal's Decision: After hearing both sides, the Tribunal referred to previous decisions where similar items were considered eligible for modvat credit as Capital goods. The Tribunal cited cases where Conveyor belts, Testing machines, Measure Tanks, and Overhead Bridge were deemed essential for production processes. The Tribunal noted that Conductive Plastic Racks were also integral to the Conveyor System. Relying on these precedents, the Tribunal found in favor of the appellants, rejecting the Revenue Appeal due to the items' essential role in the manufacturing process.

In conclusion, the Tribunal upheld the Order allowing modvat credit on the disputed items, emphasizing their significance in the manufacturing process based on established precedents and the continuous nature of the production activities.