2003 (3) TMI 239

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....engine, being a material handling equipment; that the Assistant Commissioner, under Order-in-Original No. 51/2001 dated 2-7-2001 disallowed the Modvat credit on the following two grounds : (i)       Since in this case the transportation work done by the Diesel Locomotive Engine can not be treated as process of handling of raw material in relation to manufacturing process integrally connected with further operation, leading to manufacture, the said engine can not be treated as capital goods as per the provisions of Rule 57Q(1) as existed at the relevant time. As such no Modvat credit on the said Engine is admissible, and (ii)      The Diesel Locomotive Engine is not being used within t....

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....ls within the term 'factory' although no manufacturing or storage actually takes place there. Finally the learned Chartered Accountant relied upon the decision in Ambuja Cement Eastern Ltd. v. CCE, Raipur, 2000 (50) RLT 840 (CEGAT) wherein the Modvat credit on capital goods used in lime stone mines outside the factory has been allowed by the Tribunal. 3. Countering the arguments, Ms. Charul Baranwal, learned SDR submitted that it has been settled by the judgment of the Supreme Court in Jaypee Rewa Cement v. CCE, 2001 (133) E.L.T. 3 (S.C.) that capital goods credit under Rule 57Q is available only in respect of machine/machinery used in the factory; that as the railway line is in the premises of Mangalam Cement Ltd., Modvat credit in respec....

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....the precincts of M/s. Mangalam Cement Ltd. (the owners of the Appellants' unit)." It is thus apparent that the Railway track is located in the factory premises of M/s. Mangalam Cement Ltd. The submission of the learned Chartered Accountant that the Railway track is within the precincts of the appellant factory was never the argument taken before the lower authorities. In view of their specific averment in the Memorandum of Appeal, it is apparent that the Railway track is situated within the factory premises of M/s. Mangalam Cement Ltd. and not in the factory premises of the Appellants. Mere fact that the Appellant factory is also owned by M/s. Mangalam Cement Ltd., it cannot be claimed by them that the diesel locomotive engine is being used....