1999 (9) TMI 247 - AT - Central Excise

Summary

Issues:
1. Eligibility of Modvat credit on carding/combing machines and speed frame machines.
2. Whether cotton combed/carded can be considered as 'goods'.
3. Retrospective application of Notification No. 60/94 dated 21-10-1994.

Analysis:
1. The issue involved the eligibility of Modvat credit on carding/combing machines and speed frame machines for a specific period. The Revenue contended that Modvat credit should not be available on these machines producing cotton falling under a specific category before a certain date. The Consultant argued that since the date of receipt was not mentioned in the Rule, the credit was rightly taken. He cited previous Tribunal orders and emphasized the need for a similar decision in this case. The Consultant also referred to the interplay of Modvat Rules and the retrospective application of a specific Notification.

2. The question of whether cotton combed/carded should be considered as 'goods' was crucial. The Advocate for the respondents explained the manufacturing process of yarn and highlighted that the cotton at the preparatory stage was not marketable 'goods'. He pointed out that the matter of marketability had been remanded in a previous case, and hence, a similar decision was sought in this instance. The Tribunal considered the submissions and found that a detailed evaluation of the marketability of cotton combed/carded was necessary, similar to the decision made in the previous case.

3. Regarding the retrospective application of Notification No. 60/94 dated 21-10-1994, the Tribunal emphasized the need to rectify mistakes apparent on record. They referred to previous decisions and remanded the matters concerning post-preparatory machines and parts thereof. The Tribunal also highlighted the importance of evaluating evidence on the marketability of cotton combed/carded before a specific date. As a result, the Tribunal set aside the orders-in-appeal and remanded the matters to the original authorities for a fresh evaluation and decision after hearing the assessees.

In conclusion, the Revenue appeals were allowed by way of remand, highlighting the complexity of determining Modvat credit eligibility, the classification of cotton combed/carded as 'goods', and the retrospective application of relevant notifications. The Tribunal stressed the need for a thorough evaluation of evidence and adherence to previous decisions for consistency and judicial discipline in handling such matters.