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TMI Blog2004 (1) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... cose staple fibre yarn and polyester fibre yarn and poly viscose blended yarn falling under Chapters 52 and 55 of the CETA, 1985. They are also availing the facility of Modvat credit on capital goods as per Rule 57Q of the Rules. During the month of October 1999, they have availed credit of Rs. 9,840/- on the item "plastic crates" falling under sub-heading 3923.90 in their RG 23C Part II. The Department was of the view that since this item does not fall under the term "capital goods" under Rule 57Q, they are not eligible for the benefit of Modvat credit. Show cause notice was therefore issued to the assessee which culminated in the order of the original authority whereby he has disallowed the benefit. The assessee went on appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsferring the cops from spinning to reeling without the use of bigger baskets at any stage. He has submitted that manufacture of final product is not possible without the use of Plastic crates and therefore it is an essential item. The item is also a container for handling the yarn. The plastic tubes, plastic cones and plastic bobbins on which the yarn is wrapped is also a container. The item with full cops are transferred to cone winding, doubling, auto coner sections in trollies. He has also referred to the various decisions such as (i) 2000 (123) E.L.T. 770 (ii) 2001 (132) E.L.T. 71 (iii) 1997 (96) E.L.T. 354 (iv) 1998 (101) E.L.T. 131 and (v) 1998 (102) E.L.T. 281. 5. I have considered the submissions made by both the sides and gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rails. The plastic crates with full cops are transferred to cone winding, doubling, auto coner sections in trollies. These plastic crates are essential in the manufacture of final products. If they are not used, the manufacture of final product is not possible. The material handling equipment has been held in the earlier decisions of the Tribunal to be used for producing or processing of goods and hence eligible for credit. The Hon'ble Supreme Court in the case of C.C.E. v. Jawahar Mills Ltd. reported in 2001 (132) E.L.T. 3 (S.C.) has held that the goods specified in explanation 1(c) for availing Modvat as capital goods need not be used in the manufacture of final product, the only requirement is that they should be used in the factory of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial handling equipments for producing or processing of goods and eligible for credit under Rule 57Q, though the said judgment has held that material handling equipments cannot be considered as inputs for the purpose of Notification No. 217/86-C.E. Further, the Tribunal in the case of Grasim Cement v. CCE, Raipur reported in 1997 (96) E.L.T. 354 has held that Bucket Elevator Pipes and Tubes/Ducts/Metal Bellos Screw are nothing but material handling equipment or parts thereof and hence admissible for the benefit of Modvat credit under Rule 57Q. I further find that the Tribunal in the case of Larsen and Tubro Ltd. reported in 1998 (101) E.L.T. 131 has held that material handling equipments such as wagon loader, fork lift trucks, conveyor syste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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