Modvat credit eligibility for plant lift used to move raw materials and passengers turns on actual functional use

A passenger lift used in the plant not only for carrying passengers but also for handling and shifting raw materials was treated as eligible for Modvat credit under Rule 57Q. Eligibility depended on the actual use of the lift, and the record showed a qualifying functional use connected with material movement. On that factual basis, denial of credit was unjustified, and the credit was allowed in favour of the assessee.

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Issues: Whether a passenger lift used not only for carrying passengers but also for handling and shifting raw materials in the plant was eligible for Modvat credit under Rule 57Q.

Analysis: The entitlement to Modvat credit turned on the actual use of the lift in the plant. The record showed that the passenger lift was not confined to passenger movement and was also employed for handling and shifting raw materials, a relevant use for the purposes of credit eligibility. On that factual basis, there was no justification to deny the credit.

Conclusion: The passenger lift was held eligible for Modvat credit under Rule 57Q, and the denial of credit was set aside in favour of the assessee.

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