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TMI Blog2009 (2) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... tification No. 60/94-C.E. (N.T.), dated 21-10-1994 comes to effect from 21-10-1994 ? 2. Whether the Appellate Tribunal is correct in allowing Modvat credit of duty paid on capital goods/spares namely carding and combing machines producing products namely Sliver/combed/carded cotton falling under chapter heading 52.02 of the schedule to the central Excise Tariff Act, 1985, 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. T. Chandrasekaran, SCGSC, learned counsel for the appellant submitted that the authorities had failed to see that Cotton Carded or Combed falling under Chapter 52.02 is m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 known in the trade." 5. The Supreme Court declined to grant leave against the judgment of the Delhi High 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 case like this, to find out whether there are goods, that is to say, articles as known in the market as separate distinct identifiable commodities and whether the tariff d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 cannot be brought and sold in the market and is not a commodity which is known in the trade." 7. In view of the aforesaid reasons, the substantial questions of law are answ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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