CCE, NEW DELHI Vs. LAXMI PRECISION SCREWS LTD.

JUDGEMENT

(1.) The assessees M/s. Laxmi Precision Screws Ltd., are the manufactures of nut, bolts, screws and parts falling under Chapter Sub -heading 7318.00, and 8714.00 of Central Excise Tariff Act, 1985. The Asst. Commissioner of Central Excise, Rohtak vide his Order dt. 28.10.96 disallowed the modvat credit totally amounting to Rs. 6,697.68 availed by them on the measuring instruments falling under Chapter heading 90.31 as capital goods under Explanation 1(d) (i) to Rule 57Q of the Central Excise Rules, 1944. The Asst. Commissioner of Central Excise in his order observed that times instruments are used for testing and measuring dimensions of the finished product.

(2.) The party filed an appeal and the Commissioner of Central Excise (Appeals), New Delhi vide his Order dt. 3.6.98 allowed the appeal with the observation that the process of measuring and testing various instruments as well as finished goods are essential in completion of manufacture of any goods. The second stage appeal failed by the Revenue before the CEGAT failed and the Tribunal vie its Order dt. 8.7.99 rejected the appeal of the Department upholding the order passed by the lower Appellate Authority.

(3.) The Revenue filed the present Reference Petition for referring the following question of law to the Hon'ble High Court: