Modvat credit denied for jointing material used to tighten pipe joints, as it was not capital goods in manufacture.

Pacmaan used for tightening pipe joints in sugar manufacture was treated as a jointing material rather than capital goods. Because it had no role in, or in relation to, the manufacture of the final product, it did not satisfy the description required for Modvat credit. The credit claim was therefore not available on this use of the material, and the denial of credit was upheld.

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Issues: Whether Pacmaan used for tightening the joints of pipes in the manufacture of sugar qualified as capital goods so as to entitle the assessee to Modvat credit.

Analysis: The material was found to be only a jointing material used for tightening pipe joints and had no role in, or in relation to, the manufacture of the final product. On that footing, it did not answer the description of capital goods for Modvat credit purposes.

Conclusion: The Modvat credit was rightly denied and the appeal was rejected.

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