TaxTMI 
TaxTMI 
2017 (2) TMI 667
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....duct i.e. Cotton yarn which was cleared on payment of duty. The adjudicating authority denied the Cenvat credit on the capital goods on the ground that credit on capital goods is not available if it is used in the manufacture of finished excisable goods other than the goods specified in the annexure given under Rule 57Q of Central Excise Rules, 1945. One of the goods specified is appellant s intermediate goods silver falling under Chapter 52.02, it was contended that since the capital goods was used in the manufacture of goods specified in the annexure to Rule 57Q the credit is not admissible. It was further contended that the said intermediate goods was excluded from the negative list given in the annexure vide notification no.60/94-CE(NT)....
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.... which credit was taken was used in the manufacture of silver cotton carded which exempted goods and in the exclusion list given annexure to the Rule 57Q, therefore the credit not admissible. 5. We have carefully considered submissions made by both sides. 6. We find that credit on capital goods was denied by holding that the capital goods is used for cotton carded, silver which falls under chapter 52.02 and is not excisable therefore as per annexure Rule 57Q capital goods used in the manufacture of such finished good is not eligible for the modvat credit. We find that the goods i.e cotton carded/silver manufactured by the appellant are intermediate product and not finished excisable goods. This intermediate goods were further used in ....
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....r. P. Mahadevan, learned counsel for the appellant submitted that the authorities had failed to see that Cotton Carded or Combed falling under Chapter 52.02 is manufactured by carding and combing machinery and as per Rule 57Q as it existed at that time, carding and combing machinery could not be considered as capital goods for the period from 1-3-1994 to 20-10-1994 because the goods falling under the Heading 52.02 remained excluded from the list of eligible final products. Learned counsel therefore submitted that this question has to be answered in favour of the revenue. 3. All the authorities found on facts that Sliver has no independent existence and has a transient character and therefore the processed cotton falling under Headi....
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....refore, it is necessary, in a case like this, to find out whether there are goods, that is to say, articles as known in the market as separate distinct identifiable commodities and whether the tariff duty levied would be as specified in the Schedule. Simply because a certain article falls within the Schedule it would not be dutiable under excise law if the said article is not goods known to the market. Marketability, therefore, is an essential ingredient in order to be dutiable under the Schedule to Central Excise Tariff Act, 1985." (emphasis supplied) and the decision of the Supreme Court in Collector of Central Excise v. Ambalal Sarabhai Enterprises [1989 (43) E.L.T. 214], where the Supreme Court emphasised the requirement for an....