Modvat credit denied for measuring machine used only for inspection, not in or in relation to manufacture.

Modvat credit under Rule 57Q of the Central Excise Rules, 1944 was held inadmissible for a universal measuring machine claimed to be used for checking jigs, fixtures and machined components. The Commissioner (Appeals) found that the machine was used only for measurement and not in or in relation to the manufacture of final products or intermediate products, and that the jigs and fixtures were tools or capital goods rather than final products. As no material was produced to rebut that finding, the Tribunal found no basis to disturb the denial of credit.

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Issues: Whether Modvat credit under Rule 57Q of the Central Excise Rules, 1944 was admissible on a universal measuring machine claimed to be used for checking jigs, fixtures and machined components in the manufacturing process.

Analysis: The Commissioner (Appeals) had recorded a finding that the machine was used only for measurement and not for the final product or intermediate products, and that the jigs and fixtures were tools and capital goods rather than the appellant's final products. No material was produced to rebut that finding. The Tribunal therefore found no basis to disturb the order denying credit.

Conclusion: The denial of Modvat credit was upheld and the appeal failed.

Final Conclusion: Credit on the universal measuring machine was not allowed, and the Tribunal confirmed the order denying Modvat benefit.

Ratio Decidendi: Where the assessee fails to rebut a categorical finding that the item is used only for measurement and not in or in relation to manufacture of final or intermediate products, Modvat credit under Rule 57Q is not admissible.

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