2000 (10) TMI 122 - AT - Central Excise

Summary

Issues involved: Appeal against denial of Modvat credit on PVC pipes used outside factory premises for drawing water.

Summary:
The Department appealed against the denial of Modvat credit on PVC pipes used outside the factory premises for drawing water from a well located 200 meters away. The Department argued that as the items were not used within the factory or registered premises, they were not eligible under Rule 57Q of the Central Excise Rules, 1944. The Respondents contended that the PVC pipes were essential for bringing water into the factory for manufacturing aerated water, citing a Larger Bench decision. The Tribunal found that the pipelines could be considered part of the factory under Section 2(e) of the Central Excise Act, 1944, as they were an extension of the pipelines inside the factory. Consequently, the Revenue appeal was rejected.

Decision:
The Tribunal rejected the Revenue appeal, concluding that the PVC pipes used to draw water from a well located 200 meters away could be considered part of the factory premises under Section 2(e) of the Central Excise Act, 1944. The Tribunal found that the use of the pipelines outside the factory was an extension of the pipelines inside the factory, making them eligible for Modvat credit. The Tribunal distinguished the present case from the precedent cited by the Department and upheld the Respondents' claim for Modvat credit on the PVC pipes.