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TMI Blog2001 (10) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... . 188/98 (CBE), dated 24-12-1988 passed by the Commissioner (Appeals) Trichy is against M/s Salzer Spinners Ltd. The Commissioner (Appeals) has held that the assessees are entitled to avail the Modvat credit of duty paid on the capital goods under Rule 57Q of the Central Excise Rules, 1944. The department has filed the appeal on the ground that the capital goods used for the manufacture of dutiable and exempted final goods during the period from 1-3-97 to 31-8-97 would qualify for Modvat credit under Rule 57Q only after amendment of the Notification No. 6/97-C.E. (N.T.), dated 1-3-97 by Notification No. 46/97-C.E. (N.T.), dated 1-9-97. The Revenue has submitted that in the Budget 1997 the word exclusively was omitted from Rule 57R (1) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds only and the waste, an entangled mass of yarn emerges, which is exempt from payment of duty. In other words they are manufacturing only cotton yarn which is dutiable and they have not installed the machinery for manufacturing waste yarn. Prior to the Budget 1997, the position was that if the exempted goods were exclusively manufactured from capital goods, then Modvat credit was not entitled on such capital goods. Therefore this was not the situation in their case and they have been manufacturing dutiable goods from the very beginning. The contention of the department that they had used the said credit for the manufacture of finished product hard waste which was fully exempt from duty is not legally correct and they are entitled for the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be rejected. The learned Counsel has also invited my attention to the Final Order Nos. 927-931/2001, dated 15-6-2001 [2001 (135) E.L.T. 146 (T)] of this Tribunal in the case of CCE, Coimbatore v. M/s. Hindustan Spinners Ltd. Others in which the Tribunal has held that the Commissioner (Appeals) has correctly arrived at the conclusion after properly analysing the provisions of Rule 57R and the amendment to Notification No. 46/97-C.E., dated 1-9-97, and the Bench did not find any infirmity in the said order and the Revenue appeals were rejected. 5. Appeal No. E/407/99 arises out of the Order-in-Appeal No. 24/99-(CBE), dated 18-1-1999 and is against M/s. DBV Cotton Mills Ltd. The Revenue has filed this appeal on the same grounds which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s exempted from duty or they had got converted the yarn in plain reel hanks. Sub-Rule (2) of Rule 57R further provides that the credit of the specified duty allowed in respect of any capital goods shall not to be denied or varied on the ground that intermediate products have come into existence during the course of manufacture of the final product and that such intermediate products are for the time being exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty. In view of the above provisions, the appellants are eligible for the credit of duty on the capital goods during the period from 1-3-97 to 31-8-97. 3. I have gone through carefully the facts of the case and the submissions made by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of CCE, Coimbatore v. M/s Hindustan Spinners Ltd Others (supra). 7. I have carefully considered the submissions made by both the sides and perused the order passed by the Commissioner (Appeals) and appreciated the submissions made by the assessee that they have installed the capital goods only for manufacture of cotton yarn on which they have been paying duty and not for the hard waste which emerged as a by-product during the course of manufacture of cotton yarn. The hard waste is nothing but entangled mass of good quality yarn which would have been cleared on payment of duty but for the fact that the yarn got entangled and had to be sold as waste. I find that this Tribunal in similar matter in the case of CCE, Coimb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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