Modvat credit eligibility on textile machinery turned on remand for fresh adjudication and marketability of intermediate goods.

Modvat credit claims for post-preparatory textile machines, including speed frames and parts, were not finally decided on merits because the Tribunal had already treated similar issues as requiring reconsideration; the matter was remanded for de novo adjudication. Credit claims for preparatory machines such as carding and combing machines, and their parts, also depended on whether cotton carded or combed was marketable as goods. As that marketability question required fresh examination and had likewise been remitted in a similar matter, this issue was also sent back for fresh adjudication. The appellate orders were set aside and the original authorities were directed to pass speaking orders after a fresh hearing.

---

---

Issues: (i) Whether Modvat credit on post-preparatory textile machines such as speed frames and their parts was admissible; (ii) Whether Modvat credit on preparatory machines such as carding/combing machines and their parts was admissible where the question turned on the marketability of cotton carded/combed as goods.

Issue (i): Whether Modvat credit on post-preparatory textile machines such as speed frames and their parts was admissible.

Analysis: The dispute on post-preparatory machinery was governed by the Tribunal's earlier view that such items required reconsideration and, in similar matters, had been sent back to the original authority. Following that approach and maintaining judicial discipline, the claim for credit on these machines was not finally determined on merits in the present proceedings.

Conclusion: The issue was remanded for de novo consideration.

Issue (ii): Whether Modvat credit on preparatory machines such as carding/combing machines and their parts was admissible where the question turned on the marketability of cotton carded/combed as goods.

Analysis: The admissibility of credit on preparatory machinery depended on whether, up to the relevant date, cotton carded/combed could be treated as marketable goods. Since marketability required evaluation of evidence and that question had earlier been remitted for reconsideration in a similar matter, the same course was followed here.

Conclusion: The issue was remanded for fresh adjudication on the question of marketability and consequent credit eligibility.

Final Conclusion: The impugned appellate orders were set aside and both categories of disputed Modvat credit claims were sent back to the original authorities for speaking orders after a fresh hearing.

Ratio Decidendi: Where eligibility to Modvat credit depends on unresolved questions of marketability or on issues previously requiring reconsideration, the proper course is remand for de novo adjudication rather than a final determination on merits.

---