TMI Blog2017 (2) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... it on the capital goods used for manufacture of intermediate goods i.e. silver, cotton carded which was further used in the manufacture of dutiable cotton yarn - appeal allowed - decided in favor of appellant. - E/124/97 - A/85537/17/EB - Dated:- 25-1-2017 - Mr Ramesh Nair, Member (Judicial) And Mr. C.J. Mathew, Member (Technical) Shri. H.S. Shirsat, Consultant for the Appellants Shri. Ashutosh Nath, Asstt. Commissioner(A.R.) for the Respondent ORDER Per Ramesh Nair The fact of the case is that appellant has availed the Cenvat credit amounting to ₹ 6,10,348/- on the Capital goods. The appellant is manufacturing intermediate goods such as silver which was further used in the manufacture of final product i.e. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... carded are intermediate goods and not finished goods which was further used in the cotton yarn and the same was cleared on payment of duty therefore as per provision under Rule 57Q finished goods is dutiable excisable goods and does not fall under exclusion category specified in the annexure of Rule 57Q, therefore credit is admissible. He further submits that demand is time bar as the show cause notice was issued after six months from the relevant date as there is no suppression of facts on the part of the appellant. 3. On the other hand, Shri. Ashutosh Nath, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He submits that there is no dispute that capital goods on which credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Hon ble Madras High Court in case of Commissioner of C. Ex. Tirunelveli Vs Sudarsanam Spinning Mills Ltd[2012(275) ELT 430(Mad)], wherein court passed following order: 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 goods, when this heading remained specifically excluded from the purview of capital goods under erstwhile Rule 57Q as it stood during the material time, by overriding the legal provisions. 2. Mr. P. Mahadevan, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that in a writ petition filed before the Delhi High Court in Modi Carpets Limited v. Union of India [1997 (91) E.L.T. 285], the Division Bench had considered the nature of Sliver on the basis of expert reports and held as follows :- Sliver obtained in the Petitioner 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 it was held as follows :- Therefore, it is necessary, in a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, it becomes unfit for spinning and cannot be fed into ring frames for spinning. Moreover, it is important to maintain humidity condition in the spinning Section and the Sliver is not allowed to dry. If the moisture content is lost, Sliver dries and the fibre strands fall apart and collapse and become unfit for spinning. 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 factory as described above can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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