1. Heard Shri S.K. Roychowdhury, learned Advocate on behalf of the appellant company. In this case, the issue relates to the availability of MODVAT Credit on Hand Pallet Truck and Alpine I.S.T. Room Air Conditioner. The appellant company has filed the MODVAT declaration for capital goods of the above items. The lower authority has confirmed the demand of duty for Rs. 31,861.00 (Rupees thirty-one thousand eight hundred and sixty-one) under Rule 57U of the Central Excise Rules, 1944, and imposed a penalty of Rs. 4,000.00 (Rupees four thousand) under Rule 173Q(bb) of the erstwhile Central Excise Rules, 1944. The appellant company went to the appeal and the Commissioner (Appeals) has rejected their appeal and hence this appeal before this Tribunal. Shri Roychowdhury submits that the subject Room Air Conditioner, on which the MODVAT Credit is taken, has been installed in the R. & D. Section of the factory and the Hand Pallet Truck is used for transporting the raw materials from one section to another. He also submits that since these are "capital goods", the MODVAT Credit cannot be disallowed to them, and as such, their appeal may be allowed.
2. Heard Shri Y.S. Loni, learned J.D.R. for the Revenue. He reiterates the findings of the Commissioner (Appeals).
3. I have heard both sides and perused the records of the appeal. The definition of 'Capital Goods' as available at the material time in Rule 57Q of the erstwhile Central Excise Rules, 1944 is reproduced below: (a) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing Page 489 about any change in any substance for the manufacture of final products; (b) components, spare parts and accessories of the aforesaid machines, machinery, plant, equipment, apparatus, tools or appliances used for aforesaid purposes; and (c) moulds and dies, generating sets and weigh-bridges used in the factory of the manufacturer.
(2) "specified duty" means duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975).
3.1. The Commissioner (Appeals) has rejected the appeal of the appellant company before him, on the basis of the observation that the goods, which were not used for producing or processing of any goods or for bringing about any change in any substance for the manufacture of final products, cannot be said to be 'capital goods'. Thus he held that the MODVAT Credit was not available for purposes of those goods.
3.2. I find that in the case of Commissioner of Central Excise, Chennai v. Sterling Lab. Reported in , had held that three of the Air-Conditioners used in the production hall of factory for tablet/capsule production, while the fourth one was used in quality control section of factory for checking the finished product, were eligible for MODVAT Credit under Rule 57Q of erstwhile Central Excise Rules, 1944. In the instant case also, the air-conditioners in question have been used in the R. & D. Section of the Appellant company. I hold that/the above goods qualify for MODVAT Credit as "capital goods" in terms of Rule 57Q of the erstwhile Central Excise Rules, 1944. In so far as the Hand Pallet Trucks are concerned, these are used for transporting raw materials and finished products. I find that these goods are material handling equipments. In a number of decisions, the Tribunal has held that material handling equipments are eligible for MODVAT Credit. As such, I hold that Hand Pallet Truck is also eligible for MODVAT Credit. In view of this, I allow the appeal filed by the appellant company.