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Issues: (i) Whether Modvat credit was admissible on cylindrical vertical tanks and flanged manhole covers used for storage of inputs; (ii) Whether Modvat credit was admissible on rotary piston oil sealed high vacuum pump accel refrigeration compressors classifiable under Heading 84.14.
Issue (i): Whether Modvat credit was admissible on cylindrical vertical tanks and flanged manhole covers used for storage of inputs.
Analysis: The items were used for storage of inputs and the allowance of credit on such items had already been upheld in a prior tribunal decision. No contrary legal position was shown to displace that view. On that footing, the goods were treated as eligible for credit under the relevant capital goods provision.
Conclusion: Modvat credit on cylindrical vertical tanks and flanged manhole covers was admissible and the assessee succeeded on this issue.
Issue (ii): Whether Modvat credit was admissible on rotary piston oil sealed high vacuum pump accel refrigeration compressors classifiable under Heading 84.14.
Analysis: These items were found to fall under Heading 84.14 and were expressly excluded from the scope of capital goods under Rule 57Q read with the table appended thereto. As the exclusion operated directly, the credit allowed by the appellate authority could not be sustained.
Conclusion: Modvat credit on rotary piston oil sealed high vacuum pump accel refrigeration compressors was not admissible and the Revenue succeeded on this issue.
Final Conclusion: The appellate order was sustained in part and set aside in part, with credit retained for the storage tanks and manhole covers but denied for the compressors and pumps.
Ratio Decidendi: Where goods used in storage of inputs are covered by the capital goods provision and supported by prior tribunal authority, credit is admissible, but goods specifically excluded by tariff classification and the appended table cannot qualify for Modvat credit.
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