Modvat credit for machine parts allowed where the base machine qualified as capital goods under Rule 57Q(1)(b).

Modvat credit was available on spares and parts of a cots grinding machine where the machine itself was accepted as capital goods. Once eligibility of the machine under Rule 57Q(1)(b) was not in dispute, credit could not be denied to its parts when used in the manufacture of the final product or in processing goods. The order allowing credit was found to suffer from no infirmity, and the Revenue's objection failed.

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Issues: Whether Modvat credit was admissible on spares and parts of the cots grinding machine under Rule 57Q(1)(b) of the Central Excise Rules.

Analysis: The credit on the cots grinding machine as capital goods was not disputed. On that basis, the benefit under Rule 57Q(1)(b) could not be denied to the parts of that machine when they were used in the manufacture of the final product or in processing of goods. No infirmity was found in the order allowing the credit.

Conclusion: The claim for Modvat credit on the parts of the cots grinding machine was upheld, and the Revenue's challenge failed.

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