COMMISSIONER OF CENTRAL EXCISE Vs. ASHOK LEYLAND

JUDGEMENT

(1.) THE issue is whether Modvat credit can be allowed to UPS and air -conditioners which are installed in the administrative block by the appellant's company. The appellants maintained that these UPS and airconditioners are mainly used for production related activities like engineering design, modifications, production planning and shop floor activities, etc. The original authority has denied Modvat credit on the ground that these goods are installed in the office premises. As per Rule 2 of Cenvat Credit Rules equipment or appliances used in office cannot be considered as capital goods. However, the Commissioner (Appeals) after going through the entire details of the case has come to the conclusion that the appellants are entitled for Modvat credit. The various servers and computers though installed in the administrative wing of the factory, are used for production related purposes.

(2.) SHRI B.L. Meena, ld. SDR appeared on behalf of the respondents and Shri R. Raghavan, ld. Counsel for the Revenue.

(3.) HEARD the parties. Ld. Advocate urged that the administrative block is also within the premises of the factory and the Assistant Commissioner has himself recorded in his orders that servers and other equipments are covering all operations of the company. If the servers are used for all operations of the company including those relating to design and production, in my view, Modvat credit under Rule 57Q cannot be denied. Revenue's appeal has no merit and same is rejected.