Modvat credit on manufacturing inputs allowed where control transformers, inverters and hydraulic oil were directly used in lift part production.

Modvat credit was admissible on control transformers, inverters and hydraulic oil used in the manufacture of lift parts because those items were found to be directly used in production and their value formed part of the assessable value of the final excisable goods. On that factual basis, denial of credit was not justified. The discussion also noted that air-conditioners stood apart from the other items, but the operative conclusion remained that credit was allowable for the specified inputs used in manufacture.

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Issues: Whether Modvat credit was admissible on control transformers, inverters and hydraulic oil used in the manufacture of lift parts.

Analysis: The items other than air-conditioners were found to be directly used in the manufacture of excisable lift parts and their value remained included in the assessable value of the final products. On those facts, the denial of credit was not justified.

Conclusion: Modvat credit on control transformers, inverters and hydraulic oil was admissible.

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