Modvat credit eligibility upheld for machinery components, including gear box shafts, P.V.C. cables, and turbine spares.

Modvat credit under Rule 57Q was admissible on the shaft of a gear box, P.V.C. cables, and turbine spares because the items were treated as components, spare parts, or accessories of eligible machinery. The shaft was regarded as an integral part necessary for transmission of motive power, and turbine spares were also found eligible. P.V.C. cables were covered by an earlier Tribunal view treating them as eligible inputs. Notification No. 14/96-C.E. (N.T.) did not materially change that eligibility, and pending reference proceedings did not displace the binding effect of the earlier view.

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Issues: Whether Modvat credit under Rule 57Q was admissible on shaft of gear box, P.V.C. cables, and spares of turbine.

Analysis: The items in question were treated as components, spare parts, or accessories of eligible machinery. The shaft of the gear box was held to be an integral part necessary for transmission of motive power, and turbine spares were similarly regarded as eligible. As to P.V.C. cables, the Tribunal relied on its earlier decision holding such cables to be eligible inputs. The amendment introduced by Notification No. 14/96-C.E. (N.T.) did not materially alter the eligibility of these items. The pendency of reference proceedings also did not displace the binding effect of the earlier Tribunal view.

Conclusion: Modvat credit was admissible on all the disputed items and the Revenue's challenge failed.

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