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TMI Blog2007 (1) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... ses A, B, C and D of the deed. Other clauses in the deed also make clear that what is involved is not sale and alienation of assets; but transfer on assignment. The sale was only to ensure that the new entity had enough resources for the purpose of effectively financing its own function. The transfer by assignment was not alienation of property. After the transfer also, the power plant continued to remain in the same use, dedicated solely for the generation of power for use in the steel mill. We find that this factual aspect are almost identical to the case of Renusagar Power Mill s [ 1988 (7) TMI 367 - SUPREME COURT] and in the light of judgment of Hon ble Supreme Court, this is not a case of sale of the power plant. Manufacture of the fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -9-2002, a show cause notice was issued by Central Excise authorities alleging that the separation of power plant into a new company amounted to sale of the rotor in question to a new entity and in view of this, the credit of about Rs. 2 crores taken on the rotor was required to be returned. The appellant contested the proposition but failed. In the order under challenge before us, Commissioner, Central Excise held that there was sale of the rotor to SAIL Power Company Ltd. and this sale had the effect of removal of the rotor on which capital goods credit was taken and upon removal of a particular capital goods from the factory, Modvat (Capital goods) credit was required to be returned. The present appeals challenge this finding. 4. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d after going into all the relevant aspects, the Hon'ble Supreme Court ruled that since the power plant was set up and run as a dedicated power plant for the manufacturing factory, the power generated by the power plant should be treated as power generated from Hindalco's own source of generation. This conclusion was reached by the Hon'ble Supreme Court after lifting the corporate veil and finding that the power plant (utility) was created and existed solely to support the aluminium company and that the power utility and its management and finances were all owned by the aluminium company. 6. In the present case, initially the power plant was also part of the steel mill and was also owned by Steel Authority of India Ltd. The deed of Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the factory of the manufacturer. 8. The learned SDR has also placed reliance on the decision of this Tribunal in the case of CCE, Jaipur-I v. Shree Prithvi Rolling Mills (P) Ltd. [2003 (58) RLT 6 (Tri.-Del.)] and Majestic Auto Ltd. v. CCE, Ghaziabad [2004 (173) E.L.T. 145 (Tri.-Del.)] in support of his contention that capital goods which are taken out of the factory premises, though not on sale, to other parties, cannot continue to enjoy Modvat Credit benefit. 9. The learned Counsel would point out that the above contention is not sustainable at all in the light of the judgment of the Hon'ble Supreme Court in the case of Vikram Cement [2006 (197) E.L.T. 145 Supreme Court] and the decision of this Tribunal in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve mines to cement factory. Similarly in the case of Coromandel Fertilizers Ltd., ship unloader was used for transporting materials through pipelines, as wharf was 4 km away from the factory. Clearly, the ship unloader was the only available transport for unloading materials from the wharf to factory premises. Still the Tribunal held that ship unloader was eligible for Modvat credit as capital goods. Thus holding that mere location of the capital goods outside the factory premises is no ground for denying the credit. While passing this order, Tribunal was following the ratio of Supreme Court ruling in Vikram Cement (Supra) case. In the light of these decisions, there is no merit in the contention that the rotor in question was located outsi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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