CCE Vs. SIMPSON AND CO. LTD.

JUDGEMENT

(1.) The appeal filed by revenue is directed against Order -in -Appeal No. 221/98 (M -II) dated 8.7.1998 by which the Ld. Commissioner (Appeals) has held that the fork lifts being material handling equipment is eligible for modvat credit as capital goods. He has also set aside the penalty imposed by the lower adjudication authority and allowed the appeal filed by the respondent before him.

(2.) Appearing on behalf of the respondent, Ld. Counsel Shri J. Sankararaman, Adv. submits that the issue is no longer res integra and has been settled by various judgements rendered by the Tribunal. In this connection he invited my attention to the judgment rendered by this Bench in the matter of CCE, Tiruchirappalli v. MM. Forgings Ltd. as reported in 1996 (67) ECR 93 (T) wherein it was held that the assessee is entitled to credit if it was shown that the fork lift was essentially required for use in or in relation to the manufacture of the final product. He also invited my attention to the Hon'ble Supreme Court judgment rendered in the case of CCE, Jaipur v. Rajasthan State Chemical Works as wherein it has been held that the fork lift used in the transport of raw material from one place to another can be regarded as taking part 'in relation to the manufacturer' of the final product is entitled to input credit. Ld. Counsel also invited my attention to the judgment rendered by the Eastern Bench in the case of CCE, Shillong v. Kitply Industries Ltd. as reported in 1999 (82) ECR 738 (T) in which it has been held that fork lift truck (received in 1994, before amendment of CE Rule 57Q for handling heavy raw materials and in -process materials, such equipment included in the definition of capital goods even prior to amendment of CE Rule 57Q by Notification No. 11/95 CE (NT). He also invited my attention to the judgment rendered in the case of Western India Plywoods Ltd. v. CCE, Cochin as reported in 2000 (93) ECR 67 (T) in which it was held that since fork lift truck are used within the factory for lifting and handling raw material and in processing of material they are considered as capital goods and hence are eligible to credit under Rule 57Q. This Bench while delivering the above judgment followed the Hon'ble Supreme Court's judgment rendered in the case of CCE, Jaipur v. Rajasthan State Chemical Works (supra) and the Tribunal's judgment rendered in the case of CCE, Shillong v. Kitply Industries Ltd. (supra) and held that fork lift trucks used in handling raw materials and in processing of materials have to be considered as capital goods and modvat credit is required to be extended in terms of Rule 57Q. Applying to ratio of the judgment rendered by the Apex Court and the Tribunal this Bench had allowed the appeal of the appellant Western India Plywoods Ltd. v. CCE, Cochin (supra). He also relied on the judgment rendered by the Larger Bench in the case of Jawahar Mills v. CCE Coimbatore which has been upheld by the Apex Court. In view of this legal position, Ld. Counsel submits that the appeal filed by the revenue may be rejected by sustaining the impugned order.

(3.) I have considered the rival submissions and find that the issue is no longer res integra and has been covered by the judgements referred by the Ld. Counsel and therefore respectfully following the judgements rendered by the Apex Court as well as by the Tribunal mentioned (supra) I do not find any infirmity with the order passed by the Ld. Commissioner (Appeals) and the same is sustained. The appeal filed by the revenue is, therefore, rejected. Ordered accordingly.