Modvat credit for material handling equipment was allowed for fork lift trucks and cranes used in the manufacturing process.

Fork lift trucks and cranes used to move raw materials to machines and shift finished goods to storage were treated as material handling equipment used in the manufacturing stream, and therefore as capital goods within Rule 57Q. Prior Tribunal decisions holding such items to be modvatable remained operative because they had not been stayed, and a reference on the issue did not displace that precedent. Modvat credit on fork lift trucks and cranes was admissible.

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Issues: Whether fork lift trucks and cranes used for handling raw materials and finished goods qualify as capital goods eligible for Modvat credit under Rule 57Q.

Analysis: Fork lift trucks and cranes were treated as material handling equipment used in the manufacturing stream because they carried raw materials to the machines and removed finished goods for storage. The existence of a reference on a similar question did not displace the precedential value of the existing Tribunal decisions that had held such items to be modvatable, as those orders had not been stayed. The items were therefore regarded as used in the process of manufacture within the meaning of the rule.

Conclusion: Modvat credit on fork lift trucks and cranes was admissible.

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