Modvat credit on transformer support items allowed where they were necessary for marketability and transportation.

Modvat credit was treated as admissible on support angles and bracket lashing supplied with transformers, because the items were supplied with the goods, their value was included in the assessable value, and the transformers were not marketable without them for transportation. On that basis, recovery under Rule 57-I of the Central Excise Rules, 1944 was not justified. The revenue objection failed and the order allowing credit was sustained. The stated principle is that where items supplied with goods are necessary for marketability and transportation, credit cannot be denied merely by classifying them as ineligible packing or structural material.

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Issues: Whether Modvat credit was admissible on support angles and bracket lashing supplied with transformers for transportation and marketability purposes.

Analysis: The items in question were supplied along with the transformers, their value formed part of the assessable value, and the transformers were not marketable without them for transportation. In these circumstances, there was no basis to recover the credit under Rule 57-I of the Central Excise Rules, 1944.

Conclusion: The Modvat credit was admissible and the revenue's objection failed.

Final Conclusion: The order allowing credit was sustained and the revenue appeal did not succeed.

Ratio Decidendi: Where items supplied along with goods are necessary for their marketability and transportation, and their value is included in the assessable value, Modvat credit cannot be denied merely by treating them as ineligible packing or structural material.

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