Deemed Modvat credit restricted to rerollers; manufacturer using wire rods for welding electrodes was denied the benefit.

Deemed Modvat credit under the Government of India's order dated 12 July 1990 was available only to rerollers holding eligible ingots or rerollable iron or steel material in stock on or after 16 July 1990. Although the goods were wire rods classifiable under Chapter 72 and used in making welding electrodes, the essential condition for the benefit was that the claimant be a reroller. As that condition was not met, the credit claim failed.

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Issues: Whether deemed Modvat credit under the Government of India's Order F. No. 342/1/88-TRU dated 12.07.1990 was available to a manufacturer who was not a reroller.

Analysis: The order extended credit to ingots and rerollable material of iron or steel purchased from outside and lying in stock on or after 16 July 1990 with rerollers. Although the goods in question were wire rods classifiable under Chapter 72 and used in the manufacture of welding electrodes, the essential condition for the benefit was that the claimant be a reroller. That condition was not satisfied.

Conclusion: Deemed Modvat credit was not available to the appellant, and the claim failed.

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