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TMI Blog2003 (9) TMI 148X X X X Extracts X X X X X X X X Extracts X X X X ..... and ferro alloy for which enhanced power will be required by them. We, therefore, reject the appeal filed by Revenue. - S/Shri V.K. Agrawal, Member (T) and P.G. Chacko, Member (J) [Order per : V.K. Agrawal, Member (T)]. - In this appeal, filed by Revenue, the issue involved is whether the Modvat credit of the duty paid on capital goods used in power plant is available to M/s. Jindal Steel Power Ltd. 2. Shri D.N. Chaudhary, learned SDR, submitted that the Modvat credit of the duty paid on capital goods is not available to the Respondents as the power plant has been used exclusively in the manufacture of steam which in turn has been used to generate electricity which is not excisable; that Rules 57R(1) of the Central Excise Rules, 1944 cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. He, therefore, emphasised that it cannot be said that the power plant is a captive power plant as they are already self-sufficient in power. The learned SDR also mentioned that mere placing the power plant within the boundary of the factory of the Respondents would not make them eligible for capital goods credit as the same is required to be used for manufacture of their final products. He also contended that in any case power plant installed by the Respondents is not excisable and as such the Modvat credit is not available in respect of capital goods used in assembly of power plant. 3. Countering the arguments, Shri D.N. Mehta, learned Advocate for the Respondents, submitted that the power plant and the generation of steam by it is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Order No. A/970/2002-NB, dated 23-8-2002 in the case of CCE, Bhopal v. Bhaskar Industries Limited. 4. In reply, the learned SDR, submitted that the admissibility of Modvat credit has to be determined on the basis of factors in existence at the material time and not on the basis of future use; that at the relevant time the electricity generated is sold entirely. 5. We have considered the submissions of both the sides. It is the contention of the Respondent that in a project, machine and machineries are installed in phases and the installed capacity cannot be achieved at once and that they would require more electricity once the plant starts functioning to optimum capacity. The Commissioner has appreciated this fact and has allowed the Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e when the capital goods credit was taken, that credit could not be denied. We, therefore, agree with the learned Commissioner (Appeals) that the assessee is entitled to avail the credit on the capital goods installed during implementation of second phase of the project when the composite mill had reached its third phase and where the processed grey fabrics are dutiable items." Following the ratio of the decision in Bhaskar Industries case, we hold that the Modvat credit cannot be denied to the Respondents herein as the power plant installed is a part of their expansion plant to enhance the production capacity of sponge iron, steel and ferro alloy for which enhanced power will be required by them. We, therefore, reject the appeal filed by R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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