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2017 (8) TMI 829 - BOMBAY HIGH COURTMODVAT credit - Rule 57Q - Whether the benefit of modavat under Rule 57Q would not be admissible upto 23.7.1996 following ratio of Larger Bench of the Appellate Tribunal in Jawahar Mills Ltd.Vs. CCE, [1999 (4) TMI 153 - CEGAT, NEW DELHI], holding Welding Electrodes to be capital goods upto 23.7.1996? - Held that: - on perusal of the aforesaid decision, we find that it did not deal with the issue of modvat credit of capital goods under Rule 57Q, but was concerned with modvat credit on inputs in terms of Rule 57A of the Central Excise Rules. Thus the reliance upon the aforesaid decision by the Tribunal to reject the appellant's claim is not correct - there is nothing on record to indicate the exact manner in which the welding electrodes are used in the appellant's factory. CENVAT credit is dependent upon the manner of use in the manufacture of final products in the assessee's factory. This aspect viz. manner of use of welding electrodes in the appellant's factory has not been examined for the purpose of determining whether the definition of capital goods as provided in Rule 57Q of the Central Excise Rules would be satisfied. This factual determination in the context of Rule 57Q of the Central Excise Rules is necessary before determining whether the welding electrodes in case of appellant, satisfies the definition of capital goods. Therefore, question at this stage cannot be answered. The issue restored to the Commissioner to decide afresh after considering the manner in which welding electrodes are in fact used in the factory of the appellant-assessee - appeal allowed by way of remand.
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