TMI Blog2003 (9) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... ggrieved by the order passed by the Assistant Commissioner, the Department has filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) has allowed the appeal filed by the Revenue and the reasoning given by him in the impugned order is as under :- "It is an undisputed fact that at the relevant point of time i.e. prior to 16-3-95, in order to be eligible as capital goods under Rule 57Q the goods in question ought to have had a nexus for bringing about change in the goods by direct participation in the manufacturing stream. Further, under Rule 57Q machinery which could be held to be for processing and producing goods were alone eligible for the benefit of Modvat credit prior to 16-3-95. Modvat credit in this case was ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpose, that this amendment being clarificatory in nature and hence retrospective and benefit of this amendment would be available to the appellant. The adjudicating authority has dropped the proceedings accepting the plea of the party. However, on an appeal, the Commissioner (Appeals) has allowed the departmental appeal holding that the capital goods used for R D purpose is ineligible. 4. Shri Gururaj filed a miscellaneous application to take additional grounds on record to decide the issue involved herein. Referring to the miscellaneous application No. 207/03, he said that ground for denial of credit on capital goods no longer survives in as much as the appellant has actually installed the capital goods for use in the manufacture of othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts; Modvat credit will not be available to the manufacturer. Subsequently, the exempted product becomes dutiable on account of withdrawal of exemption or the manufacturer puts the capital goods to other use would not revive the question of Modvat credit which stands determined at the time of capital goods was received.' 6. Shri Gururaj, in rejoinder submitted that additional evidence in appeal is permissible as it was held by the Supreme Court in the case of Surinder Kumar Ors. v. Gian Chand Ors. [AIR 1957 SC 875]. He also referred to the decision of the Supreme Court in the case of K. Venkatramaiah v. Seetharama Reddy [AIR 1963 SC 1526] and particularly, he read Para 13 of the said decision which is as under :- "13. It is very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the first clause of the Rule all that should be set at naught merely because the provision in the said clause was not complied with. It may be mentioned that as early as 1885, when considering a similar provision in the corresponding section of the Code of 1882, viz., S.586, the High Court of Calcutta held that this provision for recording reasons is merely directory and not imperative, Gopal Singh v. Jhakri Rai, ILR 12 Cat 37. We are aware of no case in which the correctness of this view has been doubted. It is worth noticing that when the 1908 Code was framed and O.41 R.27 took the place of the old S.568, the legislature was content to leave the provision as it was and did not think it necessary to say anything to make the requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctive in nature. On the other hand, Commissioner (Appeals) has held that the imported grinding machine used for Research and Development purpose i.e. to develop and manufacture internal grinding machine, the imported machine being technologically superior was brought into India for study in respect of technical aspects of the above grinding machine which is superior to the one manufactured by the appellants and accordingly held that imported grinding machine clearly does not fall under the purview of capital goods as it stood at the relevant point of time. It was the contention of the party before the Tribunal by filing miscellaneous application that since subsequently, same has been used for the purpose of manufacture of other dutiable fin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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