JUDGMENT

S.N. Variava, J.-These Appeals are against the Judgment dated 17th March, 2003 passed by the Customs Excise and Gold (Control) Appellate Tribunal (for short CEGAT).

2. Briefly stated the facts are as follows :

The Appellants are manufacturer of tractors. They MODVAT credit in respect of duties paid on inputs used in the manufacture of parts. Those parts were then cleared to another factory of the Appellants, without payment of duty, by virtue of Notification No. 217/86-CE dated 2nd April, 1986. The parts were then used to manufacture tractors on which duty was paid.

3. The Respondent issued a show-cause notice on the ground that MODVAT credit was not admissible as the final goods, i.e. the parts were cleared without payment of duty. The Appellants claimed that the final products were not the parts but the tractors. The Appellants claimed that duty was being paid on the tractor and, therefore, MODVAT credit was available under Notification No. 217/86-CE dated 2nd April, 1986.

4. The explanation given by the Appellants was not accepted. The Appellants therefore filed an Appeal before CEGAT. By the impugned Judgment, CEGAT has held that, as the parts are cleared from the factory w