1999 (11) TMI 682 - AT - Central Excise

Summary

Issues:
- Modvat credit eligibility for Desicant Dryer, Weighing Scale, Clearer Roller Cleaner Unit, and Portable Platform Scale.

Desicant Dryer and Weighing Scale:
The Revenue argued that the Desicant Dryer and Weighing Scale/Portable Platform Scales did not have a direct nexus with the manufacturing process and thus were not eligible for Modvat credit. However, the Consultant contended that these items were essential for the manufacturing process, citing a previous Tribunal order in their favor. The Judge found that the Desicant Dryer was necessary for maintaining the quality of cotton during manufacturing and thus qualified for Modvat credit. Similarly, the Weighing Scale was deemed eligible based on the previous Tribunal order, allowing Modvat credit under Rule 57Q.

Clearer Roller Cleaner Unit:
The Revenue claimed that the Clearer Roller Cleaner Unit did not have a direct nexus with the manufacturing process. In contrast, the Consultant argued that it was crucial for producing yarn of uniform quality in ring frames. The Judge agreed with the Consultant, stating that the Clearer Roller Cleaner Unit was essential for maintaining uniform yarn quality, making it eligible for Modvat credit under Rule 57Q.

Verification of Original Invoice:
Regarding the original invoice for the Portable Platform Scale, the Revenue contended that the credit taken was incorrect as it should have been on a duplicate invoice. However, the Consultant argued that if duty had been correctly paid and there was no chance of double credit, the credit should be allowed. The Judge upheld the Commissioner's decision to remand the matter for verification to ensure duty payment and absence of double credit, finding no issue with this approach.

Conclusion:
After analyzing the submissions and records, the Judge concluded that the Desicant Dryer, Clearer Roller Cleaner Unit, and Weighing Scale were all eligible for Modvat credit under Rule 57Q due to their direct nexus with the manufacturing process. The decision aligned with the order in appeal, dismissing the Revenue's appeal as lacking merit.