Customs, Excise and Gold Tribunal - Delhi
J.K. Udaipur Udyog Ltd. vs Cce on 2 August, 2002
Equivalent citations: 2002(83)ECC503, 2002(147)ELT996(TRI-DEL)
ORDER G.R. Sharma, Member (T)
1. This is an appeal against disallowance of Modvat credit on ropeway which is stated to be utilised for the manufacture of cement and clinker. In the manufacture of clinker the appellants are availing the benefit of Modvat credit of duty paid on capital goods and inputs. The captive mines are located at 5.8 kms from the factory. The entire quantity of limestone excavated in the mines is crushed at the mines and the crushed limestone is transferred to the factory by means of a ropeway to be utilised for the manufacture of clinker and cement in the factory. The Department alleged that since the ropeways are not within the factory, therefore, they cannot be treated as capital goods for the purpose of Modvat credit. Commissioner (Appeals), accordingly, confirmed the demand already confirmed by the Assistant Commissioner in his adjudicating order.
2. Arguing the case for the appellants Shri B.L. Narsimhan, learned Counsel submits that the issue is squarely covered by the decisions of this Tribunal in the case of CCE, Chennai v. Pepsico India Holdings Ltd. 2001 (42) RLT 800 (CEGAT) wherein the Tribunal in para 5 held as under: -
5. We have considered the submissions made by both the sides and find that pipeline can be considered in the factory in this case, it would be covered by the definition of the word 'factory' under Section 2(e) of the Central Excise Act, 1944. Therefore, we cannot find any other reason to uphold the Revenue appeal, since we find that the use of this subject pipeline is extension of the pipelines inside the factory to be used within the premises of the Respondent's factory. We find that the case of Vikas Industrial Gases (supra) has been adequately distinguished by the learned Counsel and, therefore, we find no reason in the Revenue appeal. Accordingly, we reject the Revenue appeal.
Learned Counsel, therefore, prayed that the appeal may be allowed.
3. Shri Mewa Singh, learned SDR for Revenue submits that there is a distinction between the definition of use of capital goods in the factory. He submits that under the capital goods the requirement is that the capital goods must be used within factory and since ropeways are not used within the factory, therefore, Modvat credit cannot be allowed on ropeways as capital goods.
4. We have heard the rival submissions. We note that similar issue came up before the Tribunal in the case of CCE., Chennai v. Pepsico India Holdings Ltd. (supra) in which it was held that Modvat credit as capital goods will be admissible on the pipeline outside the factory as the extension of pipeline within the factory. In the instant case also, ropeways are partly inside the factory and party outside the factory. The extension outside the factroy is a part of ropeway inside the factory, therefore, it should be treated as capital goods and Modvat credit ha rightly been taken by the appellants. In the circumstances, the appeal is allowed. Consequential relief, if any, shall be admissible to the appellants in accordance with law.