Modvat credit on electrical items used with production machinery was allowed as eligible input-related equipment.

Modvat credit was considered admissible on fuse link, spare kit, contactor, wires and cables, and lightning arrester used with machines employed in or in relation to production of the final product. The items were treated as eligible because they were used with machinery having a production nexus, and the Tribunal relied on the Supreme Court's dismissal of the Revenue's challenge in the connected Jawahar Mills matter. On that basis, the disputed credit was allowed and the Revenue's appeal failed.

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Issues: Whether Modvat Credit was admissible on fuse link, spare kit, contactor, wires and cables, and lightning arrester used with machines employed in or in relation to the production of the final product.

Analysis: The items in question were found to be used with machines that were themselves used in or in relation to production. In view of the dismissal of the Revenue's challenge in the connected Jawahar Mills matter by the Supreme Court, the Tribunal found no infirmity in allowing the credit on the disputed items.

Conclusion: Modvat Credit on the disputed electrical items was held admissible and the Revenue's appeal failed.

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