TaxTMI 
TaxTMI 
1998 (12) TMI 195
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....p;This is an appeal filed by the department against the order passed by Commissioner (Appeals), Trichy wherein he has held that the assessee is entitled to the benefit of Modvat credit. 2.The assessee are manufacturers of Cotton Yarn falling under Heading 5203 of the schedule to the Central Excise Tariff Act, 1985. The assessee availed Modvat credit to the tune of Rs. 6,71,327.97 on the following....
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....credit could be given after disallowing 2.5% of the credit for every quarter of use upto 21-10-1994. 4.The department challenges the same on the ground inter alia that the Notification No. 60/94, dated 21-10-1994 is not retrospective in its operation. In respect of electrical goods, it is argued by the department that the goods are used for control and distribution of electricity only and credit ....
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....5 & 16 has held as follows :- 14. This evidence clearly shows that the product is both marketed and marketable. What is more significant than the sale enumerated therein is that the two mills had no in-house carding/combing machines of their own and had to purchase carded/combed cotton from outside for the manufacture of yarn. Thus in a continuously recurring manner, this item is bought and sold.....
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.... carded/combed cotton is an essential stage in spinning of yarn and that yarn cannot be spun otherwise directly from cotton fibre. 15.The other argument that the same machine is used for MMF also is irrelevant as long as such use is not exclusive thereto. Respondent admits that cotton fibre too is fed-in to produce cotton combed/carded. Since we hold that these are goods, they fall under 52.02. I....