Modvat credit on steel shots allowed, while credit on HSD or lubricating oil remained disallowed under the input notification.

Modvat credit was treated as admissible on steel shots because the Revenue accepted that the point was covered by Tribunal precedent, and the credit was allowed. Credit on HSD or lubricating oil was disallowed because the material was treated as HSD, and in any event lubricating oil falling under sub-heading 2710.90 was held not to qualify as an input under Notification No. 8/95. The denial of credit on that item therefore remained in force, while relief was granted only for steel shots.

---

---

Issues: (i) Whether Modvat credit was admissible on Steel Shots. (ii) Whether Modvat credit was admissible on HSD or lubricating oil.

Issue (i): Whether Modvat credit was admissible on Steel Shots.

Analysis: The Revenue accepted that credit on Steel Shots could not be disputed in view of the Tribunal decision relied upon during hearing. The matter was therefore treated as covered in favour of the appellants.

Conclusion: Modvat credit on Steel Shots was allowed in favour of the assessee.

Issue (ii): Whether Modvat credit was admissible on HSD or lubricating oil.

Analysis: The claim was rejected because the material was treated as HSD and not lubricating oil. It was further held that, even assuming it to be lubricating oil, it did not qualify as an input for the purpose of Notification No. 8/95 dated 16-3-1995, since it fell under sub-heading 2710.90.

Conclusion: Modvat credit on HSD or lubricating oil was disallowed and the lower authorities' order was upheld against the assessee.

Final Conclusion: The appeal succeeded only to the extent of Steel Shots, while the denial of credit on HSD or lubricating oil remained undisturbed.

---