Modvat credit on mould components allowed where Centre Column and Bottom Plates formed part of recognised capital goods.

Modvat credit was held admissible on Centre Column and Bottom Plates used as integral parts of moulds, because moulds and dies were recognised as capital goods under the applicable excise and CENVAT regime. The scheme treated moulds and dies as eligible items before and after the CENVAT Rules, 2001, and no material change in law justified denying credit on the ground that these components formed part of the moulds. Credit was therefore allowed, and the denial was unsustainable.

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Issues: Whether Modvat credit could be denied on Centre Column and Bottom Plates used as part of moulds, when moulds and dies were recognised as capital goods under the applicable excise/CENVAT regime.

Analysis: The relevant scheme treated moulds and dies as eligible items both before and after the CENVAT Rules, 2001, and there was no material change in the legal position affecting their treatment. On the facts found, the Centre Column and Bottom Plates formed part and parcel of the moulds. Since the articles were integral to the moulds and the law did not undergo any change that would justify a different treatment, credit could not be denied merely on that basis.

Conclusion: Modvat credit on the Centre Column and Bottom Plates was admissible, and the denial of credit was unsustainable.

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