2009 (4) TMI 526

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..... ndent. [Judgment per : Prabha Sridevan, J.]. -  In this civil miscellaneous appeal, the following substantial question of law was framed for consideration :- "Whether the CESTAT is correct in allowing Modvat credit of duty paid on capital goods/spares namely carding and combing machines producing final products namely Sliver/combed/carded cotton falling under Ch. 52.02 are eligible capital .....

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..... orities found on facts that "Sliver" has no independent existence and has a transient character and therefore the processed cotton falling under Heading 52.02 during manufacture of cotton yarn are incomplete excisable goods and cannot be qualified as final products to deny MODVAT credit invoking Rule 57Q. The final product viz., cotton yarn was cleared on payment of duty. Thus carded/combed cotton .....

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..... er's factory as described above cannot be brought and sold in the market and is not a commodity which is know in the trade." 5. The Supreme Court declined to grant leave [1996 (81) E.L.T. A47 (S.C.)] against the judgment of the Delhi Court in Modi Carpets Limited case [1997 (91) E.L.T. 285]. They also relied on Bhor Industries Ltd. v. Collector of Central Excise [1989 (40) E.L.T. 280], where .....

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..... terprises [1989 (43) E.L.T. 214], where the Supreme Court emphasised the requirement for any product to be called 'goods' "it must be something which can ordinarily come to the market to be brought and sold and is known to the market". 6. In both the judgments viz., judgment of the Division Bench of the Delhi High Court Modi Carpets Limited v. Union of India - [1997 (91) E.L.T. 285], and the .....

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..... Sliver cannot be packed and transported in view of its non-cohesive and brittle nature. Any form of packing entailing even the slightest pressure would entangle the fibre and render it unfit for spinning. Upon such entanglement, it would cease to be Sliver. Because of the very nature of the Sliver, it's non-cohesive and brittle property as described above, Sliver obtained in the Petitioner's facto .....

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