1996 (10) TMI 295 - AT - Central Excise

Summary

Issues:
Determining whether gantry crane, transformers, and trolley are considered capital goods eligible for input duty credit under the Modvat scheme.

Analysis:
The appeals revolved around the eligibility of gantry crane, transformers, and trolley for Modvat credit. The Department contended that these items were not eligible as they did not participate in the manufacturing process. However, the Commissioner (Appeals) ruled in favor of the appellants, stating that gantry crane and transformers were indeed capital goods eligible for Modvat credit. The Department appealed this decision.

The appellant argued that gantry crane and trolley were merely used for moving inputs and did not qualify as capital goods under Rule 57Q. The Assistant Commissioner denied the benefit, and the appellant disagreed with the Commissioner (Appeals) decision.

On the other hand, the respondents' counsel cited precedents to support their claim. They referenced a Tribunal decision regarding a mobile crane and Supreme Court judgments related to pollution control apparatus being integral to the manufacturing process. The counsel contended that gantry crane, trolley, and transformers should be eligible for Rule 57Q benefits based on these precedents.

After hearing both sides, the judge referred to the Apex Court's ruling on the transfer of raw materials being an integral part of the manufacturing process. The judge found that gantry crane and trolley were essential for transferring marble slabs for sawing, making them integral to the manufacturing process. Therefore, the judge deemed gantry crane and trolley eligible for Rule 57Q benefits.

Regarding transformers, the judge noted that they were classified as capital goods under Rule 57Q from a specific date. Citing a Tribunal decision, the judge upheld that transformers were indeed capital goods and entitled to Rule 57Q benefits.

In conclusion, the judge ruled that gantry crane, trolley, and transformers were eligible for the benefit of Rule 57Q. As a result, the appeals filed by the Revenue were rejected, and the Commissioner (Appeals) decisions were upheld.