Per G.R. Sharma :

The short issue for determination in this appeal is whether Modvat credit can be utilised before the use of capital goods in the installed plant. The facts leading to the present appeal are that the appellants are engaged in the manufacture of Graphite Electrodes. They procured materials for expansion and modernisation of their plant which was already existing for manufacture of Graphite Electrodes right from 1977. The department alleged that some of the inputs which they are claiming to be capital goods, were not capital goods. The second allegation was that the credit was taken before the new furnace actually started operating. On the first issue, the Ld. Commissioner (Appeals) decided the case in favour of the assessee holding that those items were capital goods. Therefore, the only issue agitated before us was whether Modvat credit could be utilised before operating of the furnace in which these goods were used.

2. Shri S.N. Kohli, ld. Advocate appearing for the appellants submits that this issue is already decided by the Tribunal in favour of the assessee under Tribunal's order in the case of Pudumjee Pulp & Paper Mills Ltd. Vs. Commissioner of Central Exc