1997 (4) TMI 265 - AT - Central Excise

Appellate Tribunal Allows Modvat Credit for Grinding Wheels in Vehicle Manufacturing

The Appellate Tribunal allowed Modvat credit for grinding wheels used in the manufacture of motor vehicles, stating they are not excluded under Rule 57A ... MODVAT credit - exclusion clause in Rule 57A - tools and parts of grinding machinery - part of a toolMODVAT credit - exclusion clause in Rule 57A - tools and parts of grinding machinery - part of a tool - Whether grinding wheels used in the appellant's factory are entitled to MODVAT credit or are excluded as tools and parts of grinding machinery under Rule 57A. - HELD THAT: - The Tribunal accepted the uncontested factual position that grinding wheels cannot be used independently and are used only as part of grinding machinery. The Assistant Collector had recorded that the grinding wheel is part of grinding machinery. Applying the principle that an item which is only a part of a tool does not fall within the exclusion under Rule 57A, and following this Tribunal's decision in Union Carbide India Ltd. v. Collector of Central Excise, the grinding wheels are not hit by the exclusion clause. On that basis the Tribunal held that the goods qualify for MODVAT credit.Grinding wheels held to be eligible for MODVAT credit; exclusion in Rule 57A not attracted.Final Conclusion: The appeal is allowed on the ground that the grinding wheels are parts of grinding machinery and therefore entitled to MODVAT credit, the exclusion in Rule 57A being inapplicable. The Appellate Tribunal allowed Modvat credit for grinding wheels used in the manufacture of motor vehicles, stating that they are not excluded under Rule 57A as they are part of a tool and entitled to credit. The decision was based on a previous case involving Union Carbide India Ltd.