2008 (7) TMI 1 - HC - Central Excise

High Court Upholds Modvat Credit for Iron & Steel in Vessel Installation

The High Court upheld the Tribunal's decision allowing modvat credit on iron and steel items used for a batch vessel's installation, deeming them ... Credit on channel, angles, joints, squares, equal angles of iron & steel used for installation of batch vessel – goods once brought in factory for use in the principal plant & machinery, which are directly used in mfg. of excisable articles, are the capital goods - Tribunal has rightly come to the conclusion that aforesaid items used for installation of batch vessel form an essential part of the plant and machinery, therefore, credit is not deniable – no substantial question of law is involved Issues:Appeal against modvat credit benefit on items used for installation of batch vessel.Analysis:The appeal was filed against the order passed by the Customs, Excise, and Service Tax Appellate Tribunal, New Delhi, regarding the modvat credit benefit on certain iron and steel items used for the installation of a batch vessel. The Commissioner (Appeals) had allowed the modvat credit, considering the items as essential parts of the plant and machinery. The revenue contended that the benefit should not be available based on a previous decision, but the Tribunal disagreed, distinguishing the cases. The High Court found no merit in the appeal, stating that no substantial question of law was involved. They upheld the Tribunal's decision, citing a previous case where similar items were considered essential for plant and machinery. The Court emphasized the necessity of the items for the installation and functioning of the batch vessel, categorizing them as capital goods when directly used in manufacturing excisable articles. Consequently, the Court dismissed the appeal, concluding that no grounds for interference were established.