9911796707
TMI Blog2001 (12) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 84,011/-, the Department issued show cause notice to the appellants under Rule 57U read with Section 11A of the Central Excise Act. By letter dated 9-11-94, the party contested the demand in respect of Hardness Tester. In that letter, they also stated that a refund application was being submitted to the Asstt. Collector for the amount of credit of Rs. 1,38,750/- reversed in their RG-23C Part II. By their subsequent letter dated 22-4-96, the party contested the proposal for recovery of duty on Fork Lifter. In adjudication of the dispute, the adjudicating authority rejected the assessee's defence and ordered recovery of the amount of Rs. 84,011/- and also imposed on them a penalty of Rs. 5,000/-. The appeal preferred by the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting the hardness of rear axle shafts, which were parts of the appellants' final products namely motor vehicles. Without testing of the quality of such parts, the process of manufacture of the final products was not complete. Therefore, the Hardness Tester was integrally connected with the process of manufacture of the final products and hence eligible as capital goods for Modvat credit under Rule 57Q. Ld. Counsel, in this connection, has relied on the decision of the Tribunal in the case of Walchand Nagar Indus. Ltd. Ors. v. CCE [1996 (83) E.L.T. 117 (Tribunal) = 1996 (63) ECR 190 (Tribunal)]. Ld. Counsel has, therefore, prayed for allowing the appeals. 4. Ld. SDR, Shri A.S. Bedi submits that the question of Modvatability of Fork Lifte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h their plea that the testing of hardness of rear axle shaft is an integral part of the process of manufacture of the final products (motor vehicles). It follows from this factual situation that Hardness Tester was used in the manufacture of the final products and hence eligible as capital goods for Modvat credit under Rule 57Q. In the cited case of Walchand Nagar Indus. Ltd. Ors. (Supra), a quality testing equipment was held to be eligible capital goods under Rule 57Q. This decision appears to support the present appellant' case also. 6. In view of the above finding, the impugned order cannot be sustained. Accordingly, I allow this appeal to the extent the decision of the lower appellate authority on the Modvatability of Hardness Teste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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