1999 (4) TMI 198 - AT - Central Excise

Summary

Issues:
1. Interpretation of Rule 57Q for granting Modvat credit on capital goods.
2. Whether a Hydraulic hand pollat truck qualifies as a capital good under Rule 57Q.
3. Comparison with previous judgments on material handling equipment for Modvat credit eligibility.
4. Verification of essential use of the Hydraulic hand pollat truck for manufacturing final products.

Analysis:
1. The appeal involves the interpretation of Rule 57Q for granting Modvat credit on capital goods. The Commissioner (Appeals) had granted Modvat credit on a Hydraulic hand pollat truck under Rules 57S proviso, considering it essential for material movement in the manufacturing process.

2. The Revenue contested this decision, arguing that Rule 57Q only covers specific items like moulds, dyes, generating sets, and weighing bridges for Modvat credit, excluding items like the pollat truck. The argument focused on the item not falling within the description of terms under Rule 57Q.

3. The appellant's counsel cited precedents where material handling equipment, including overhead cranes and cane unloaders, were considered capital goods eligible for Modvat credit under Rule 57Q. These cases established that items essential for manufacturing final products could qualify for Modvat benefits.

4. In response, the Tribunal noted that material handling equipment had consistently been deemed eligible for Modvat credit in previous judgments. The Tribunal also highlighted a case where a Fork Lift was considered eligible for Modvat benefit when essential for manufacturing final products. In the present case, the appellant had provided detailed explanations on the essential use of the Hydraulic hand pollat truck, which satisfied the Commissioner (Appeals) without the need for remand.

5. Considering the precedents and the appellant's explanation, the Tribunal rejected the appeal, affirming the Commissioner's decision to grant Modvat credit on the Hydraulic hand pollat truck. The judgment emphasized that if material handling items were essential for manufacturing final products, Modvat benefits should be granted, aligning with the facts presented in the case.