TMI Blog2005 (12) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... become an ingredient of the assessable value of the final product cleared by the latter on payment of duty. Thus, duty gets paid on the job-worked goods at a later stage and, therefore, such goods cannot be categorized as exempted goods for purposes of Rule 57C or Rule 57R. Thus, the Larger Bench decision in Sterlite Industries (I) Ltd. Vs. Commissioner [ 2004 (12) TMI 108 - CESTAT, MUMBAI] , operates in favour of the respondents. In the instant case, it has been submitted on behalf of the respondents that the capital goods in question might be used, at some time in future, for manufacturing piston valves or other parts of IC Engine otherwise than on job work basis and the products so manufactured might be cleared on payment of duty. In suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57U (2) and also the assessee was liable to be penalized under Rule 57U (6). The original authority upheld this stand of the Revenue and held that the credit of Rs. 6,36,660/- taken by the assessee on the above capital goods was recoverable from them. It also imposed a penalty of equal amount on the party under Rule 57U (6). The decision of the adjudicating authority was set aside by the Commissioner (Appeals). Hence the present appeal. 2. After examining the records and hearing both sides, I find that the short question to be considered is whether the above availment of Modvat credit by the assessee was hit by the provisions of Rule 57R, which, inter alia, stipulated that any capital goods to be eligible for Modvat credit under Rule 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d" occurring in the definition of capital goods and held that any capital goods to be eligible for credit need not be actually used and can be used some time in future also. In this context, it has been submitted that the capital goods in question were capable of being used in future for the manufacture of dutiable goods. The credit in question have not been utilized so far. It will be utilized only if dutiable goods manufactured by using such capital goods are removed on payment of duty in future. 3. After giving careful consideration to the submissions, I find that the Larger Bench did not recognize job-worked goods as "exempted goods" for purposes of Rule 57C, which provision mandated that no credit of duty paid on inputs shall be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the appellants at a future date. The word 'used' can denote be intermittent and or use sometime in future; we find that both sides agree that the appellants are a manufacturer of declared final products iron and steel and have the capacity or potential to use iron ore fines also. Therefore, credit as over led cannot be denied". In the instant case, it has been submitted on behalf of the respondents that the capital goods in question might be used, at some time in future, for manufacturing piston valves or other parts of IC Engine otherwise than on job work basis and the products so manufactured might be cleared on payment of duty. In such .an eventuality, the capital goods in question would be eligible for Modvat credit. Then alone w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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