Modvat credit on ropeway capital goods allowed where later precedent covered transport equipment used between factories.

Modvat credit was held admissible on a ropeway treated as capital goods for transporting clinker between factories, because the Tribunal followed a later decision allowing credit on a ropeway used to transport limestone under Rule 57Q. The earlier contrary view on conveyance equipment for moving raw material was treated as not governing the issue, and the assessee's claim was covered by the later, more directly applicable precedent. The disallowance was therefore set aside in favour of the assessee.

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Issues: Whether Modvat credit was admissible on ropeway used as capital goods for transporting clinker from one factory to another.

Analysis: The denial of credit was based on an earlier view that conveyance equipment used for transporting raw material was not eligible under Rule 57Q of the Central Excise Rules. The Tribunal noted that a later and more directly applicable decision had allowed credit on ropeway used for transporting limestone, and that the Revenue's challenge to that view had been dismissed as not pressed. On that basis, the earlier contrary decision was treated as not governing the issue, and the appellants' case was held to be covered by the later decision allowing credit on similar capital goods.

Conclusion: Modvat credit on the ropeway was held admissible and the disallowance was set aside in favour of the assessee.

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