2004 (11) TMI 155 - AT - Central Excise

Summary

Issues involved:
- Eligibility for Modvat credit on certain capital goods used in the manufacture of Cement.
- Classification of goods as capital goods and their eligibility for credit.
- Determination of whether certain items used in mines are entitled to Modvat credit.

Analysis:

Issue 1: Eligibility for Modvat credit on certain capital goods
- The appellants, engaged in Cement manufacturing, filed appeals against Orders-in-Appeal regarding Modvat credit eligibility.
- H.M. Plates: Allowed Modvat credit based on usage for machinery/spares manufacturing.
- Carrying Idlers: Credit allowed for use within the factory.
- Airconditioners: Credit allowed for controlling environment in kiln control room.
- PVC Profiles: Credit allowed for electric connection purpose.

Issue 2: Classification of goods as capital goods
- Steel Wire Rope: Allowed credit as part of Ropeway system handling raw materials.
- Return Idler: Credit allowed for conveyor system parts.
- Bulldozer: Credit allowed for material handling in factory and mines.
- Spares for Compressors: Credit allowed for use inside factory premises.
- Inger Sole Drilling Machine: Remanded for further verification.
- Spares for drilling equipment: Not eligible for credit due to usage in mines.
- Spare parts for old crane: Not eligible for credit due to exclusive usage in mines.

Issue 3: Determination of entitlement for Modvat credit on items used in mines
- Definition of factory: Mine not considered part of factory as per recent Supreme Court decisions.
- Lime stone extraction: Contention on mines being considered factory due to extraction of excisable goods.
- Apex Court decision: Mine not qualifying as a factory where no manufacturing process occurs.
- Conclusion: Items used in mines not entitled to Modvat credit.

Conclusion:
The Tribunal allowed Modvat credit on various capital goods used in Cement manufacturing within the factory premises. However, items exclusively used in mines were not eligible for credit based on the definition of a factory and recent Supreme Court decisions. The appeals were disposed of accordingly.