COMMISSIONER OF C. EX. Vs. HABASITIAKOKA (P) LTD.

JUDGEMENT

(1.) THE Commissioner of Central Excise, Coimbatore is the appellant. The substantial question of law raised in this appeal reads as under.

(2.) THE respondent assessee availed Modvat credit in respect of capital goods used in the manufacture of Leather Nylon Sandwitch Beltings in its registered factory. By order dated 12 -6 -2000, the original authority held that the respondent had two units namely (1) Central Excise registered factory producing excisable final products and (2) another unit called Mother Roll Plant which was not registered under the Central Excise Rules; that they purchased capital goods and installed in their registered factory and took the credit of the duty paid thereon; that subsequently for want of space, they shifted the machinery to their another Unit namely Mother Roll Plant which was situated 500 mts away from the registered unit and that at the time of removal of the capital goods, they neither obtained permission nor reversed the credit of duty taken on the said capital goods. The department reversed the credit amount of Rs. 87,976/ -. The claim made by the respondent assessee for refund of the said amount was on the ground that the capital goods installed in their Mother Roll Plant was eligible for the credit of duty inasmuch as the said plant process the goods of the registered factory. The original authority rejected the claim by holding that 57Q(1) stipulates that the capital goods should be installed in the place of manufacture of final products and not in the place outside the place of manufacture of final products. The Commissioner affirmed the order of the original authority. The respondent approached the Tribunal and the Tribunal by the impugned order dated 15 -10 -2004 allowed the appeal and directed for refund to be sanctioned. Before passing the impugned order, the Tribunal called for the report of the Commissionerate. The Tribunal, after noting the findings contained in the report of the Commissioner held that the Mother Roll Plant is for all practical purposes, part of the appellants main factory and it can be reasonably held that the subject capital goods were used by the respondent in the factory of production of final products and therefore, it was entitled to avail Modvat credit of the duty paid thereon under Rule 57Q.

(3.) LEARNED counsel for the respondent brought to our notice, the decision of the Tribunal reported in : 2006 (196) E.L.T. 18 : 2007 (8) S.T.R. 318 (Tribunal) Pooja Forge Ltd. v. Commissioner of Central Excise, Faridabad, wherein the Tribunal, in the circumstances, has taken a similar view in tune with the views of the order of the Tribunal impugned in this appeal.