(1.) THIS appeal of the Revenue is against the order of the Commissioner (Appeals) allowing Modvat Credit of Rs. 81,119/ - on Front End Loader under Rule 57Q of the CE Rules, 1944. Examined the records. The Respondents are engaged in the manufacture of sugar and molasses. Front End Loader is a machine used for feeding bagasse from bagasse yard into the boiler furnace through bagasse carrier. Undisputedly the boiler furnace is a part of the sugar manufacturing plant and bagasse is a fuel used for operating the boiler. In other words, Front End Loader is a material handling equipment used in the assessee's plant. The lower appellate authority has taken note of this fact and allowed Modvat Credit on the item under Rule 57Q following Tribunal's decisions rendered in certain cases wherein similar material handling equipments were considered. The lower appellate authority has held that Front End Loader is a "machine/machinery used for producing any goods" and hence covered by the "main definition" of "Capital Goods". In the present appeal, the Revenue has challenged this decision mainly on the ground that the item in question, falling under chapter heading 84.29 stood expressly excluded from the ambit of the definition of "capital goods" under Rule 57Q at the material time.
(2.) THE learned DR has reiterated the above ground before me today and has drawn my attention to the definition of "capital goods" under Rule 57Q.
(3.) I have considered the submissions of the learned DR and have examined the relevant provisions of law. Apparently, there is no dispute of the fact that Front End Loader on which the Modvat Credit was taken by the assessee on 25.12.1996 is covered under chapter heading 84.29 of the Schedule to the CET Act 1985. I find that the goods falling under this tariff entry stood expressly excluded from the coverage of the definition of "capital goods" at the material time. The learned Commissioner (Appeals) appears to have fallen into an error in holding that the item is covered by the "main definition" of the term "capital goods". It is true that there was such a definition of the term "capital goods" under Rule 57Q prior to 23.7.1996. The term "capital goods" has had an exclusive and self contained definition incorporated into Rule 57Q by Notification No. 14/96 -CE (NT) dated 23.7.1996. It is this definition which is applicable to the goods in question on which the credit was taken on 25.12.1996. According to this definition, the goods falling under chapter heading 84.29 stood excluded from the coverage of the definition of "capital goods" as already noted. In view the above position of law, credit was not admissible to Front End Loader falling under sub -heading 84.29 at the material time. The decision of the lower appellate authority requires to be set aside and that of the original authority to be restored. I allow this appeal after setting side the impugned order of the Commissioner (Appeals).