2001 (12) TMI 143

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....t of Fork Lifter. For the remaining credit of Rs. 84,011/-, the Department issued show cause notice to the appellants under Rule 57U read with Section 11A of the Central Excise Act. By letter dated 9-11-94, the party contested the demand in respect of Hardness Tester. In that letter, they also stated that a refund application was being submitted to the Asstt. Collector for the amount of credit of Rs. 1,38,750/- reversed in their RG-23C Part II. By their subsequent letter dated 22-4-96, the party contested the proposal for recovery of duty on Fork Lifter. In adjudication of the dispute, the adjudicating authority rejected the assessee's defence and ordered recovery of the amount of Rs. 84,011/- and also imposed on them a penalty of Rs. 5,000....

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....ubmits that it was an equipment used for testing the hardness of rear axle shafts, which were parts of the appellants' final products namely motor vehicles. Without testing of the quality of such parts, the process of manufacture of the final products was not complete. Therefore, the Hardness Tester was integrally connected with the process of manufacture of the final products and hence eligible as capital goods for Modvat credit under Rule 57Q. Ld. Counsel, in this connection, has relied on the decision of the Tribunal in the case of Walchand Nagar Indus. Ltd. & Ors. v. CCE [1996 (83) E.L.T. 117 (Tribunal) = 1996 (63) ECR 190 (Tribunal)]. Ld. Counsel has, therefore, prayed for allowing the appeals. 4. Ld. SDR, Shri A.S. Bedi submits tha....