TaxTMI 
TaxTMI 
1994 (12) TMI 223
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.... worn out machine parts available with the respondent. 2. The learned SDR pleaded that the learned lower authority has erred in having allowed the Modvat credit in respect of old machine parts. He pleaded by the very nature the old machine parts could not be taken to be re-rollable. He pleaded that the facility of deemed Modvat credit is available in respect of Ingots or such re-rollable materials. In this connection, he also referred to the grounds of appeal set out in the Appeal Memorandum, particularly to grounds (1) and (2) which are reproduced below for convenience of reference :- "1. Under the proviso to Rule 57A(2) duty of excise should have been imposed on the inputs. The parts of machinery which are worn out or broken h....
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..... She pleaded that various Benches of the Tribunal have consistently taken this view. 4. We observe that the point that falls for consideration is whether the Modvat credit can be allowed in respect of the used and worn out machinery parts which have been brought as inputs by the appellants for the purpose of re-rolling. We observe that under the impugned order, the issue dealt with is relating to the benefit of Modvat credit in respect of the frames and discarded rails and machinery parts. We find from the grounds of appeal that the Revenue is aggrieved only in respect of Modvat credit allowed for the machinery parts. We observe that so far as the machinery parts are concerned, these would be in forms which rendered them useful in th....
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.... the Modvat credit that can be taken is equivalent to the duty paid on the inputs or little more wherever so specified as in the case of goods manufactured and cleared from the Small Scale Units. The Deemed Modvat Credit which has been fixed is fixed in respect of iron and steel items taking into consideration the rate of duty prevailing in the past in respect of iron and steel items. In this background, therefore, it is to be held that the deemed Modvat credit rate fixed is only in respect of iron and steel items which are available in the market and should not be taken to be for that machinery items unless it could be shown that these machinery items had been sold as scrap of iron and steel. In principle, we agree with the plea of the Rev....