2001 (10) TMI 225 - AT - Central Excise

Summary

Issues:
- Modvat credit eligibility for computer hardware, lubricants, and synthetic wax roller under Rule 57Q of the Central Excise Rules, 1944.

Analysis:
The appellants filed an application stating that the Tribunal had overlooked the modvatability question of synthetic wax roller in Final Order No. A/100/01/NB(SM). The lower appellate authority disallowed Modvat credit on computer hardware and lubricants without considering the eligibility of synthetic wax roller. The appellants challenged this decision and claimed that the issue regarding the synthetic wax roller was also missed by the Tribunal. The Tribunal acknowledged the error and decided to rectify it after hearing both parties.

The Tribunal found that the lower appellate authority had indeed ignored the aspect of synthetic wax roller's eligibility for Modvat credit under Rule 57Q. The appellants argued that the synthetic wax roller was used as an accessory to the autoconer machine for waxing yarns as per customer requirements. Evidence, including samples and photographs, supported this claim. The Tribunal determined that the synthetic wax roller was a consumable raw material directly involved in the final product's manufacturing process and not a component or spare part of the machinery. As such, the Tribunal upheld the adjudicating authority's decision that the synthetic wax roller was not eligible for capital goods credit. The appellants had not previously requested Modvat credit for the wax roller under Rule 57A as an input, and the Tribunal declined to entertain this plea at the second appellate stage.

The Tribunal renumbered the existing paragraph in the Final Order and allowed the application in favor of the appellants, specifying that Modvat credit would not be extended to the synthetic wax roller.