Modvat credit on lathe machine rejected where use was limited to roller repair and not shown in manufacture of final goods.

A lathe machine used only for smoothing and repairing rollers of a cold rolling mill was not accepted as capital goods for Modvat credit under Rule 57Q. On the admitted facts, it was neither an accessory nor part of the rolling mill, and the record did not show use in the manufacture of the final product. A claim based on indirect use in manufacture was therefore rejected on the facts of the case, and denial of Modvat credit was upheld.

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Issues: Whether the appellant was entitled to Modvat credit on a lathe machine claimed as capital goods under Rule 57Q of the Central Excise Rules.

Analysis: The lathe machine was used only for smoothing and repairing the rollers of the cold rolling mill when required. On the admitted facts, it was not an accessory or part of the rolling mill, and the record did not show that it was used in the manufacture of the final product. The claim based on indirect use in manufacture was therefore not accepted on the facts of the case.

Conclusion: The lathe machine did not qualify for Modvat credit as capital goods under Rule 57Q, and the denial of credit was upheld against the assessee.

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