1999 (3) TMI 264

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..... arn. He submits that the facts are that this cone winding machine was received by one unit of the appellants where the final product i.e. yarn is manufactured. However, due to operational reasons, the appellant manufacturer has also established another unit nearby in a separate premises and this cone winding machine on receipt in the first unit on appropriate duty paying documents was shifted to the said subsidiary unit and installed there, but credit was taken by the receiving first unit. 3. Learned Advocate submits that in the dispute Modvat credit would be available to first receiving unit because of the following reasons :- (a) It is not disputed that capital goods concerned was received by the first unit of the manufacturer on appr .....

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..... tity under Central Excise Law as they are having separate registration numbers under Rule 174. (ii) If capital goods is installed in a factory to which it was not consigned and it has not taken credit, then under Rule 57Q another factory, where the capital goods are not installed, cannot take the credit even though final product may emerge from that factory. (iii) Learned DR interprets the words in the factory of the manufacturer to mean the very same factory where the final product emerges. He submits that this expression is different from the expression in in a factory of the manufacturer . In the second case there would have been a case that credit would have been available if the machine was installed in any factory belonging to .....

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..... ifies for the definition of capital goods as contained in Rule 57Q. So, I come to the second question. Here, a plain reading of Rule 57Q shows that it is necessary that capital goods on which Modvat credit is sought to be taken, is to be installed in that very factory of a manufacturer of final products where such product ultimately emerges. This is because, the Legislature has used the words in the factory of the manufacturer . The use is of the word the as a specific article as against an unspecific article, for example an or a . Therefore, it is difficult to read into this rule a more expansive meaning than what is contained by use of the definite article the . This view is also more harmonious with the concept of the capital good .....

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