2001 (8) TMI 265 - AT - Central Excise

Summary

Issues involved: Eligibility to Modvat credit under Rule 57Q for various items used in the factory for manufacturing caustic soda and chlorine.

Summary:
The appeal considered the eligibility of Modvat credit under Rule 57Q for items used in manufacturing caustic soda and chlorine. The Commissioner's order was challenged regarding the denial of credit for certain goods. The goods in question were material handling equipment, electrical machinery, cement, twisted steel bearing, beams, channels, angles, joists, and plates of mild steel.

The Tribunal referred to a previous decision confirming that goods not directly involved in production or processing but necessary for manufacturing qualify as capital goods. The argument against considering certain items as capital goods due to their use in civil construction work was rejected. The rules at the relevant time did not explicitly prohibit credit for goods used in the manufacture of immovable property.

The Tribunal emphasized that the term "plant" in Rule 57Q includes buildings necessary for factory operations. It was noted that buildings housing machinery and raw materials are essential for manufacturing activities. The decision highlighted that goods required for making finished products, even if not directly involved in production, qualify as capital goods.

The Tribunal directed the appellant to provide evidence to show the usage of the disputed items for specific purposes within two months. The appeal was allowed for all other items, with the limited issue of certain goods remanded to the Commissioner for further consideration in line with the law.