Modvat credit on process tanks upheld where cylindrical vertical tanks were used during manufacture and treated as capital goods.

Cylindrical vertical tanks used for storing chemicals during the manufacturing process were treated as capital goods eligible for Modvat credit. The Tribunal relied on its consistent earlier view that equipment or parts of plant used in processing goods can qualify for such credit, and the Commissioner (Appeals) followed that precedent. The assessee's entitlement to Modvat credit was upheld and the Revenue's challenge failed.

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Issues: Whether cylindrical vertical tanks used for storage of chemicals were eligible capital goods for Modvat credit.

Analysis: The tanks were used for keeping materials during the process of manufacture, and the Tribunal had consistently taken the view that such equipment or parts of plant used for processing goods qualified for Modvat credit. The order of the Commissioner (Appeals) followed the earlier Tribunal decisions on the same question.

Conclusion: The tanks were eligible capital goods for Modvat credit. The Revenue's appeal was rejected.

Final Conclusion: The assessee's entitlement to Modvat credit on the cylindrical vertical tanks was upheld and the Revenue's challenge failed.

Ratio Decidendi: Equipment or plant used during the process of manufacture for keeping materials can qualify as capital goods for Modvat credit where consistent Tribunal precedent supports such treatment.

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