Modvat credit for integral engine parts used in power tiller manufacture was held admissible.

Entitlement to Modvat credit was examined for headlight assembly and dynamo used with IC engines manufactured for power tillers. The items were treated as integral parts of the IC engines and as inputs used in the manufacture of the finished product. On that basis, the reasoning of the lower appellate authority was accepted as proper, and credit on both items was held admissible.

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Issues: Entitlement to Modvat credit on headlight assembly and dynamo used with IC engines manufactured by the assessee.

Analysis: The headlight assembly and dynamo were treated as integral parts of the IC engines and were used in the manufacture of power tillers. The reasoning adopted by the lower appellate authority was found to be proper for allowing credit on both items.

Conclusion: Modvat credit on the headlight assembly and dynamo was held admissible.

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