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TMI Blog2004 (7) TMI 212X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 171/2004-C.E. (SLM), dated 22-3-2004 passed by the Commissioner of Central Excise (Appeals) Salem by which the Commissioner has modified the order of the original authority and allowed the appeal filed by the department. The original authority has allowed the benefit of Modvat credit on capital goods and dropped the proceedings against the appellants. 3. The appellants herein are manufacturers of cotton Flax blended yarn and Cellulosic spun yarn falling under Ch. 52, 54 and 55 and were availing Modvat credit on capital goods under Rule 57Q. They took Modvat credit of Rs. 6,83,890/- on certain capital goods received by them during 4/94 to 6/94. As the intermediate product viz. Carded/Combed cotton which emerged during the course of ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viz. combed/carded cotton, which is also known as sliver, has emerged during the course of manufacture of final product The learned Counsel also produced a copy of the Tribunal order in support of his plea for allowing the appeal. 5. Shri A. Jayachandran, learned JDR appearing for the Department defended the impugned order. 6. I have considered the rival submissions and gone through the case records. I have also perused the order in Appeal which is under challenge before me. It is seen from Para 7.2.1 of the impugned order that the lower appellate authority has noted that the department had come in appeal before her on the ground that the original authority has gone beyond the directions of the Tribunal and should have demanded the wron ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital goods, because of emergence of intermediate product, viz. sliver (carded/combed cotton), the Tribunal has not expressed any opinion and the issue was left open. Further, the assessee was also given liberty to put forth all the pleas as are open to them under law, in the remand order. This would mean that the lower authority was expected to decide the issue on merits after ascertaining the marketability of the product "sliver" and after considering the pleas put forth by the assessee. This was what exactly the exercise done by the lower original authority. For instance, had the original authority ascertained only the marketability of the goods "sliver" and left undecided the other question i.e. availability of Modvat credit, the main ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Modern Woollens Ltd. v. CCE, Jaipur, 1998 (99) E.L.T. 411 has held that carded gilled slivers wholly of wool emerging at intermediate stage during the manufacture of woollen yarn is not goods, being incapable of being marketed. I further note that the Tribunal in the case of CCE, Coimbatore v. Mettur Spinning Mills reported in 2001 (135) E.L.T. 678 has held that no duty is leviable on the intermediate product carded/combed cotton, emerging at the intermediate stage. Further, in our order in the case of Sudarshanam Others (supra) the Tribunal has adverted to the clarification issued by the Central Board of Excise Customs vide Circular No. 665/56/2002-CX., dated 25-9-2002 wherein it was clarified that Cenvat credit should not be d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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