2002 (2) TMI 285 - AT - Central Excise

Summary

Issues involved: Eligibility of Modvat credit on duty paid for various goods used in manufacturing storage bins, conveyance, ceramic tiles, and electrostatic precipitator.

Eligibility of Modvat credit on goods used in the manufacture of immovable capital goods:
The appeal considered the denial of credit on goods used in the manufacture of storage tanks and conveyance on the basis that they were immovable property. Referring to a previous decision in United Phosphorous Ltd. v. CCE, the Tribunal held that there was no legal provision to deny credit under Rule 57Q on the grounds of immovability. The Tribunal applied this ratio to the current case and set aside the order denying credit on goods used in the manufacture of immovable capital goods.

Denial of credit on inputs for electrostatic precipitator:
The appellant withdrew the claim for duty paid on ceramic tiles. The denial of credit on inputs for the electrostatic precipitator was based on the argument that the machinery was only used for pollution control and not in the manufacture of finished goods. The appellant acknowledged this use, stating it was to remove suspended particulate matter from smoke vented into the atmosphere. Citing the judgment in Indian Farmers Fertilisers Coop. Ltd. v. CCE, which held that machinery used to clean effluents in the factory is part of the manufacturing process, the Tribunal allowed the appeal and set aside the impugned order, except for the credit taken on ceramic tiles.