Modvat credit on forklift truck parts upheld where Revenue failed to disprove use in manufacture and no legal question arose.

Modvat credit on parts and accessories used in manufacturing forklift trucks was not shown to be inadmissible where the record did not establish the precise nature of the disputed items or demonstrate that they were not used in the final product. The Court accepted the Tribunal's factual finding that the Revenue had not proved error in the allowance of credit, and held that a component's possible use in other motor vehicles does not by itself defeat credit when it is used in relation to manufacture of the final product. No question of law arose for reference.

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Issues: Whether Modvat credit under Rule 57A of the Central Excise Rules, 1944 was admissible on parts and accessories used in the manufacture of forklift trucks, and whether any question of law arose for reference under Section 35H(1) of the Central Excise Act, 1944.

Analysis: The claim for credit was rejected by the Assistant Commissioner but allowed in appeal on the footing that there was no material to show that the disputed parts were not actually used in the manufacture of forklift trucks. The Court noted that the precise nature of the parts was not established on the record and therefore the Revenue could not demonstrate any error in the Tribunal's finding. It further held that the mere fact that a component may also be used in other motor vehicles does not, by itself, make Modvat credit inadmissible when the item is used in relation to the manufacture of the final product.

Conclusion: Modvat credit was not shown to be inadmissible on the facts, and no question of law arose for opinion.

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