Capital goods credit upheld for plant handling equipment used in internal movement of materials during manufacturing.

Input tax credit was treated as admissible on ingot mould car bogie assembly used within the factory to move molten metal, semi-finished goods, finished goods and other materials between divisions, because the item was considered integral to the manufacturing process. The reasoning relied on a Board circular stating that components, spares and accessories used with specified capital goods qualify for credit regardless of classification, and on prior reasoning that railway tracks used inside a plant for handling raw and processed material support credit eligibility. Authorities cited by the Revenue were held inapplicable on the facts, and the credit denial was set aside.

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Issues: Whether credit was admissible on ingot mould car bogie assembly as capital goods used in the manufacturing process.

Analysis: The item was found to be used within the factory for transportation of molten metal, semi-finished products, finished products and other materials from one division to another, without which movement of material and production activity could not be effectively carried on. The Board's circular clarified that components, spares and accessories used with specified capital goods were eligible for credit irrespective of classification. The reasoning in the decision on railway tracks used inside the plant for handling raw material and processed material was applied, and the contrary authorities cited by Revenue were held inapplicable on the facts.

Conclusion: Credit on the ingot mould car bogie assembly was held admissible and the denial was set aside in favour of the assessee.

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