Modvat credit on forklifts used for intra-factory material handling was upheld as capital goods under binding precedent

Forklifts used within a factory for shifting materials during the manufacturing process qualify as capital goods for Modvat credit when covered by binding co-ordinate Bench precedent. Applying judicial discipline, the Tribunal followed earlier decisions that treated such intra-factory material-handling equipment as admissible for credit. The Revenue's challenge failed, and the order allowing Modvat credit on the forklift was upheld.

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Issues: Whether Modvat credit was admissible on a forklift used within the factory for shifting materials during the course of manufacture, treating it as capital goods.

Analysis: The disputed item was used for moving goods from one place to another inside the factory in the course of manufacture of the final product. The issue was already covered by earlier Tribunal decisions holding that a forklift so used is to be treated as capital goods for Modvat purposes. Following those decisions in judicial discipline, the Bench found no reason to take a different view.

Conclusion: Modvat credit on the forklift was admissible and the Revenue's challenge failed.

Final Conclusion: The order allowing credit was upheld and the Revenue appeal was rejected.

Ratio Decidendi: Forklifts used within the factory for shifting materials during the manufacturing process qualify as capital goods for Modvat credit when binding co-ordinate Bench precedent has so held.

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