Modvat credit on polishing bricks upheld where they were necessary inputs for finishing granite and producing the final polish.

Modvat credit was held admissible on polishing bricks used to polish and finish granite, because polished granite could not be manufactured without them and the finishing quality actually emanated from those goods. On that reasoning, the bricks were treated as necessary inputs and not excluded by Explanation (1) to Rule 57A of the Central Excise Rules, 1944. The departmental challenge failed, and the assessee remained entitled to the credit claimed.

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Issues: Whether Modvat credit was admissible on polishing bricks used for polishing and giving finish to granite.

Analysis: The question stood covered by the Tribunal's earlier decision in the assessee's own case, which had held that polished granite could not be manufactured without polishing bricks and that the polish on granite actually came from such bricks. On that reasoning, the goods were treated as necessary inputs and not excluded by Explanation (1) to Rule 57A of the Central Excise Rules, 1944.

Conclusion: Modvat credit on polishing bricks was admissible and the department's challenge failed.

Final Conclusion: The departmental appeal was rejected, leaving the assessee entitled to the credit claimed.

Ratio Decidendi: Goods which are necessary for bringing about the final polished product and from which the finishing quality actually emanates are not excluded inputs for Modvat purposes under Rule 57A of the Central Excise Rules, 1944.

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