Per Sidharath S. Sekhon :

This appeal preferred by the Department against the order in appeal passed by the Commissioner (Appeals).

2. Appearing on behalf of the Department the Ld. D.R. submits that the appeal is regarding the denial of Modvat credit on PVC pipes used outside the factory premises for the purposes of drawing water from the well situated 200 metres distance factory premises. This water is raw material for manufacturing of aerated water in the factory premises.

3. The Department contends that since the items which are used for drawing water are not used in the factory of the assessees or even not used within the registered premises of the assessees factory they are not eligible under Rule 57Q of the Central Excise Rules 1944. Shri Sudarsan, Ld. D.R. reiterates the departmental grounds in the present appeal and submits that the appeal be allowed.

4. Shri Nambirajan, Ld. Counsel, appearing on behalf of the Respondents submits that the well is situated only 200 metres away from the factory and is owned by the assessees and water is an essential ingredient for the manufacture of final product i.e. aerated water without this PVC pipes in question the water cannot be broug