Modvat credit for hoist spares allowed where material handling equipment was treated as capital goods under Rule 57Q.

Spares used with a hoist were treated as eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944, because the hoist was regarded as material handling equipment with a sufficient nexus to manufacture. The Tribunal relied on its earlier view that material handling equipment such as cranes, forklifts, conveyor belts and hoists can fall within the scope of capital goods for Rule 57Q purposes. On that basis, the credit claim for the hoist spares was accepted and the Revenue appeal failed.

---

---

Issues: Whether spares for a hoist were eligible for Modvat credit as capital goods under Rule 57Q of the Central Excise Rules, 1944.

Analysis: The hoist was treated as material handling equipment, and the Tribunal relied on its earlier decisions holding that material handling equipment such as cranes, forklifts, conveyor belts and hoists can fall within the scope of capital goods for the purpose of Rule 57Q. Following the ratio of the earlier decision on similar lifting and handling machinery, the credit claim for spares used in connection with the hoist was considered covered by the established view that such equipment has the requisite nexus with manufacture for the purposes of Modvat credit.

Conclusion: The spares for the hoist were held eligible for Modvat credit as capital goods, and the Revenue appeal failed.

---