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TMI Blog2005 (3) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... n the manufacture of "Cotton Yarn" (Chapter 52 of the CETA Schedule) and were availing the benefit of capital goods credit under Rule 57Q of the Central Excise Rules, 1944 during the material period (1-3-1997 to 31-8-1997). They had taken total credit of Rs. 31,55,136/- on capital goods received by them during the said period. The Department took the view that it was not open to them to avail such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Revenue has filed the present appeal, challenging the view taken by the Commissioner (Appeals). 2. Ld. SDR has reiterated the grounds of the appeal and has also pointed out that, as the respondents had removed Cotton Waste (Hard Waste) without payment of duty during the period of dispute, they were not entitled to take Modvat credit of the duty paid on capital goods used for the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Modvat credit on any capital goods, to the effect that such capital goods shall not be used exclusively for production of any final product which was wholly exempt from payment of duty. The word 'exclusively' occurring in the above provision is significant. The legislative intent behind the use of the word 'exclusively' in the provision is obvious. Capital goods in respect of which the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacture of Cotton Yarn. In any case, as held by the Tribunal in the case of Gobald Textiles (supra), the Hard Waste, which was cleared without payment of duty during the relevant period was not to be treated as a final product. The Revenue has no case that the respondents were registered with the Department for manufacture of Hard Waste. In the case of Darshan Agroils (supra), it was held that " ..... X X X X Extracts X X X X X X X X Extracts X X X X
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