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TMI Blog2001 (12) TMI 737X X X X Extracts X X X X X X X X Extracts X X X X ..... le capital goods in terms of Rule 57Q to avail the Modvat credit is an issue to be considered. He said that the dumpers are used for bringing blasted limestone from the quarry to the crusher. The transfer of raw material is a preliminary operation and a part of continuing process but for which the manufacture would be impossible. Handling of raw materials for the purpose of transfer is then integrally connected with the process of manufacture. Accordingly, the items i.e dumpers which have taken part in the process of manufacture should be treated as capital goods in terms of Rule 57Q of the Central Excise Rules to avail Modvat credit. He said that the very issue has already been considered by the Tribunal in the case of ACC Limited v. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed in the case of Shree Cements reported in 2001 (132) E.L.T. 254 while deciding the Modvat on dumpers. She also relied upon the decision of the Tribunal in the case of CCE, Hyderabad v. India Cements [2000 (118) E.L.T. 700] where Modvat credit was disallowed on excavators and dumpers used in the mine, with the observations that mines are excluded from the precincts of the factory as defined under Section 2(e) of the Central Excise Act read with Section 2(m) of the Factories Act. She said that Modvat on dumpers cannot be allowed since they were not used in the factory and nor used in the manufacturing process, which starts only when the raw material have been brought together in the factory. 4. Shri Nambiar replied that Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he use of the input within the factory premises nor does the said Rule 57A require the inputs to be brought within the factory premises at any point of time. While countering the arguments the Departmental Representative submitted that Rule 57Q specifies that the goods should be used in the factory of the manufacture of final products to avail credit as capital goods. Shri Nambiar said that apart from not charging that it was not used in the factory premises, the item was used within the precincts of the factory since mine was also included and declared as factory as per the plan submitted to the Department and the Registration Certificate issued by the Department. He also referred to the decision of the Tribunal in the case of Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... related to the further operation for the end result would also be a process in or in relation to manufacture. Further, the transfer of raw material is a preliminary operation and a part of continuous process for which the manufacture would be impossible. The handling of the raw materials for the purpose of such transfer is then integrally connected with the process of manufacture. The handling for the purpose of transfer may be manual or mechanic. Relying on the said judgment of the Supreme Court, the Tribunal had held that cane unloader for unloading the cane was integral process in the manufacture of sugar and therefore eligible, to be considered as capital goods within the meaning of Rule 57Q [Mansurpur Sugar Mills Ltd]. Further, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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