Modvat credit for speed frame equipment was remanded for fresh reconsideration after comparison with draw frame rulings.

Modvat credit for a speed frame used in cotton yarn manufacture was treated as requiring reconsideration because the machine operated only after the carding, combing and drawing stages and was viewed as comparable to draw frames considered in earlier decisions. On that basis, the existing orders were found unsustainable, and both the appellate and original orders were set aside. The matter was remanded to the original authority for de novo consideration on the same lines.

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Issues: Whether Modvat credit was admissible in respect of the speed frame used in the cotton yarn manufacturing process and whether the matter required remand for de novo consideration.

Analysis: The speed frame was found to come into use only after the carding, combing and drawing stages were completed. The reasoning applied in earlier decisions concerning draw frames was treated as relevant because the speed frame occupied a comparable position in the manufacturing flow. Following those decisions, the existing order was considered unsustainable and the matter was fit to be re-examined by the original authority on the same lines.

Conclusion: The impugned appellate order and the original order were set aside and the matter was remanded for de novo consideration.

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