NEER SHREE CEMENT Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE issue involved in the appeal, filed by Neer Shree Cement, is whether Capital Goods Credit is available to them under Rule 57A of the Central Excise Rules, 1944 in respect of the Diesel Locomotive Engine.

(2.) 1 Shri P. Malik, learned Chartered Accountant, submitted that the Appellants manufacture cement and have taken Modvat credit of the duty paid on diesel locomotive 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 :

(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 M/s Mangalam Cement Ltd., Modvat credit in respect of diesel locomotive engine can not be taken by the Appellants as the said engine is not used inside the factory of the Appellants; that at the relevant time the factories of M/s Mangalam Cement Ltd. and the Appellant factory were registered separately and as such cannot be treated as one factory; that ownership of the factory is not material as one company can own many factories.