ORDER
Gowri Shankar, Member (T)
1. The question for determination in this appeal is whether power driven pumps used by the assessee in the manufacture of paper, “capital goods” and Modvat credit could be taken on the duty paid on them. The Assistant Commissioner had accepted the assessee’s claim. In appeal the Commissioner (Appeals) has held that the pumps are not capital goods because they do not satisfy the requirements of Rule 57Q, that they must be used for producing or processing any goods or for bringing about any change or substance for the manufacture of the final product.
2. The advocate for the appellant explained that the pumps were used at various places in the plant to lift and to carry pulp, from which the paper is made from one machine to another during various processes in the course of manufacture. He contends that for them to be considered capital goods, it is not necessary that the pumps themselves be used for the purposes specified in the rule. He relies upon this Tribunal’s decision in C.C.E. v. Uttam Industrial Engg. P. Ltd., 1996 (86) E.L.T. 498, C.C.E. v. Nova Udyog Ltd., 1966 (88) E.L.T. 532 and C.C.E. v. M.M. Forgings Ltd., 1997 (89) E.L.T. 617 (Tribunal).
3. The Departmental Representative contends that these decisions related to other goods and that the pumps cannot be considered capital goods since they do not satisfy the requirements specifically provided in the rule.
4. In the decisions relied upon by the appellant, material handling equipment such as frames and electric wires and cables have been held to be capital goods. The reasoning in these decisions is that without the use of the goods, which they considered, the final product could not be manufactured in the assessee’s factory; since cranes were necessary for transport of the raw material, and wires and cables supplied electricity without which most of the machinery in the factory would not operate. Therefore, even if the cranes or wires and cables themselves did not bring about any change, the finished product could not be manufactured without these. This rationale would apply to the present case too. Paper pulp itself cannot be processed or changed to paper unless it is transported by the pumps in question from stage to stage in the appellant’s plant. Further Rule 57Q includes in its definition of capital goods, components of the plant of the assessee. Now, the assessee’s plant is one for making paper, out of the raw materials normally used to make paper. Pulp is either a raw material or an intermediate product in the manufacture of paper. It is, in fact, the penultimate product. Therefore the pumps used to transport the pulp within the plant would be components of that plant and would be entitled to Modvat credit as such components. Appellant was entitled to credit of the duty paid on goods.
5. Appeal allowed. Consequential relief if any.