2004 (1) TMI 567 - AT - Central Excise

Summary

Issues:
Appeal against denial of Modvat credit for card cans as capital goods.

Analysis:
The appellants, engaged in manufacturing fabrics, appealed against the denial of Modvat credit for card cans as capital goods. The Revenue contended that card cans are solely for storage and not involved in manufacturing final products. The Commissioner (Appeals) held that card cans do not qualify as capital goods. However, the appellants argued that card cans are essential in the manufacturing process to get sliver directly into them. They cited a Supreme Court decision to support their claim. The Tribunal noted that card cans are used in the yarn industry for storing and transferring materials. Referring to the Supreme Court's ruling in a similar case, the Tribunal held that as card cans are used with machines, they are eligible for Modvat credit. Consequently, the impugned order was set aside, and the appeals were allowed.