Modvat credit on factory handling equipment allowed where a jib crane assisted the manufacturing process and qualified as capital goods.

Equipment used within the factory for handling raw materials and finished goods in the course of manufacture qualifies as capital goods for Modvat credit under Rule 57Q when it assists the manufacturing process. On that basis, a jib crane used for internal material handling was treated as eligible capital goods, and credit was not denied. The reasoning followed the Tribunal's earlier view that machinery, equipment, components, spares and accessories used for such handling fall within the provision as it stood during the relevant period.

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Issues: Whether a jib crane used for handling raw materials and final products inside the factory is eligible as capital goods for Modvat credit under Rule 57Q.

Analysis: The dispute was covered by the Tribunal's earlier view that machinery and equipment used for handling raw materials and finished goods within the factory, and their components, spares and accessories assisting the manufacturing process, fall within the scope of capital goods eligible for credit. The order also treated the issue as concluded by the earlier decision relied upon, particularly the discussion that the relevant provision has to be applied as it stood during the material period.

Conclusion: The jib crane was held to be eligible capital goods and Modvat credit was not denied; the appeal failed.

Ratio Decidendi: Equipment used within the factory for handling materials in the course of manufacture qualifies as capital goods for Modvat credit under Rule 57Q.

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