2005 (12) TMI 309 - AT - Central Excise

Summary

Issues involved:
Whether the appellants are eligible for Modvat credit on testing panel falling under Heading No. 85.37 during the period from 1/96 to 3/96.

Analysis:
The issue in this appeal pertains to the eligibility of the appellants for Modvat credit on a testing panel under Heading No. 85.37. The lower authorities denied the credit citing that Heading No. 85.37 was not listed as eligible for Modvat credit for capital goods. The appellants argued that a previous Tribunal order had remanded the case to the original authority, emphasizing that testing machines crucial for marketability should be considered akin to machines involved in the production process. The Tribunal found that if the disputed testing panel functions as a machine used to measure specifications and tolerances of raw materials and finished goods critical for the marketability of final products, it falls under the description in Rule 57Q of the Central Excise Rules. However, since the issue had been remanded previously and no decision was made, the Tribunal deemed it appropriate to remand the matter again for factual verification. Consequently, the Commissioner (Appeals) order was set aside, and the appeal was allowed for remand to the original authority for a fresh decision after verifying the facts. The judgment was pronounced on 9-12-2005.