2002 (8) TMI 166 - AT - Central Excise

Summary

Issues involved: Appeal against disallowance of Modvat credit on ropeway used for manufacturing cement and clinker.

Details of the Judgment:

1. The appellants appealed against the disallowance of Modvat credit on a ropeway used for transferring crushed limestone from captive mines to the factory for manufacturing clinker and cement. The Department contended that since the ropeways were not within the factory, they could not be considered as capital goods for Modvat credit. The Commissioner (Appeals) upheld the decision.

2. The appellants argued that a similar issue was addressed in a previous Tribunal case, C.C.E., Chennai v. Pepsico India Holdings Ltd., where it was held that certain infrastructure outside the factory could be considered as part of the factory for Modvat credit purposes. The appellants requested that their appeal be allowed based on this precedent.

3. The Revenue submitted that capital goods must be used within the factory to qualify for Modvat credit, and since the ropeways were not entirely within the factory, they should not be eligible for the credit.

4. The Tribunal noted the precedent set in the case of C.C.E., Chennai v. Pepsico India Holdings Ltd., where it was established that certain infrastructure outside the factory could be considered as part of the factory for Modvat credit purposes. In this case, as the ropeways were partly inside and partly outside the factory, the extension outside was deemed as part of the ropeway inside the factory, making it eligible for Modvat credit. The appeal was allowed, and any consequential relief was to be granted to the appellants as per the law.