2016 (7) TMI 1137 - AT - Central Excise

Eligibility for Modvat credit of duty paid on capital goods under the then Rule 57Q of Central Excise Rules, 1944 - Held that - An identical matter came up for decision by the Tribunal in respect of the same appellant. The Tribunal in the decision (1998 (3) TMI 311 - CEGAT, CALCUTTA) held that the concept of mobile factory is alien to the Central Excise Act, 1944 and no Modvat credit will be available to these items. Following the same ratio, find that there is no merit in the appeal filed by the appellant and the same is accordingly dismissed.

Summary

Issues involved:
Eligibility of the appellant for Modvat credit of duty paid on capital goods under Rule 57Q of Central Excise Rules, 1944.

Analysis:
The dispute in the present appeal revolved around the appellant's claim for Modvat credit on duty paid on various items, including a special purpose motor vehicle, drivers cabin, hydraulic power point, chassis with the engine, etc., under the category of capital goods. The appellant argued that the special delivery truck functioned as a mobile plant/factory crucial for the production and delivery of finished goods. However, the Original Authority and the Commissioner both denied the credit, stating that the special purpose motor vehicle was merely providing transportation of ingredients and did not qualify as a factory under the Central Excise Act, 1944. The Commissioner (Appeals) upheld this decision based on the Tribunal's ruling in the appellant's previous case.

Upon hearing both sides, the Member (Technical) referred to a previous Tribunal decision concerning the same appellant, where it was held that the concept of a mobile factory was not recognized under the Central Excise Act, 1944, and Modvat credit was not applicable to such items. Consequently, the Member found no merit in the appellant's appeal and dismissed it accordingly.

In conclusion, the Tribunal, through Member (Technical), upheld the lower authorities' decision to deny the appellant Modvat credit on duty paid for items like the special purpose motor vehicle, drivers cabin, hydraulic power point, chassis with the engine, etc., as they did not meet the criteria of capital goods under Rule 57Q of the Central Excise Rules, 1944. The concept of a mobile factory was deemed inapplicable, and the appeal was dismissed based on the precedent set by a previous Tribunal ruling on the same matter.