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2001 (12) TMI 143 - AT - Central Excise
Issues: Modvat credit on Fork Lifter and Hardness Tester under Rule 57Q of Central Excise Rules, 1944
Issue 1: Modvat credit on Fork Lifter The appellants initially took Modvat credit on Fork Lifter but voluntarily reversed it before the show cause notice was issued. The dispute in this appeal pertained to the recovery of credit on the Hardness Tester only. The Tribunal found that since the Fork Lifter issue was resolved by the appellants themselves, the appeal should focus solely on the Modvat credit related to the Hardness Tester. The Tribunal allowed the appellants to pursue their refund claim for the reversed credit on Fork Lifter. Therefore, the question of Modvat credit on Fork Lifter was not considered further in this appeal. Issue 2: Modvat credit on Hardness Tester The appellants contended that the Hardness Tester was an essential equipment used in testing the hardness of rear axle shafts, integral to the manufacturing process of their final products, i.e., motor vehicles. They argued that the Hardness Tester qualified as capital goods for Modvat credit under Rule 57Q. The Tribunal acknowledged that the testing of hardness was crucial in the manufacturing process and upheld the appellants' claim. Referring to the case of Walchand Nagar Indus. Ltd. & Ors., where a quality testing equipment was deemed eligible as capital goods, the Tribunal supported the appellants' position. Consequently, the Tribunal ruled in favor of the appellants, allowing the appeal against the decision of the lower appellate authority regarding the Modvatability of the Hardness Tester. In conclusion, the Tribunal's judgment focused on the Modvat credit issues concerning Fork Lifter and Hardness Tester under Rule 57Q. While the appeal regarding the Fork Lifter credit was not entertained due to voluntary reversal by the appellants, the Tribunal upheld the appellants' claim regarding the eligibility of the Hardness Tester as capital goods for Modvat credit, based on its integral role in the manufacturing process.
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