1998 (7) TMI 332

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....t, for the Respondent. [Order]. - Heard both sides. The issue involved herein is whether the benefit of Modvat credit on welding electrodes used in manufacture of the capital goods inside the factory is permissible under Rule 57D(2) or not. The respondents herein had made a declaration for the said goods under Rule 57G declaring the aforesaid purpose of the inputs. 2. A show cause no....

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....e authority, the respondents herein succeeded which has held that the welding electrodes are used in manufacture of the goods as well as manufacture of plant and machine. Hence this appeal by the Revenue. 4. Learned JDR, Shri T.A. Arunachalam submits that welding electrodes cannot be said to have been used in or in relation to manufacture of final product i.e. paper manufactured by the res....

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....Rule 57Q ...... or capital goods for the time being exempt from the whole of the duty of excise leviable thereon or chargeable to nil rate of duty". He submits it is not denied by the Revenue that the welding electrodes had been used in fabrication of the recausticising plant. In the view of the foregoing, the benefit of Modvat credit of duty paid on welding electrodes cannot be denied as an input....

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....learned consultant for the respondents that if I accept Revenue's interpretation the provisions of Rule 57D(2) as extracted above will become superfluous. Such a view, therefore, cannot be taken. Even though welding electrodes cannot be said to have been used directly in manufacture of the final product i.e. paper but by virtue of this Rule 57D(2) the inputs become admissible to Modvat credit. The....