Jyoti Balasundaram, Member (J)

1. The issue for determination in this appeal of the Revenue is the admissibility of Modvat Credit of Rs. 4,96,388.42 of floor mats falling under Heading 87.08 of the CET, 1985 supplied by the respondents as accessories with light commercial vehicles manufactured by them. The Assistant Collector disallowed modvat credit availed of for the period from September 1989 to January 1990 on the ground that it cannot be considered as an input "used in or in relation to the manufacture of motor vehicles". The lower appellate authority set aside the demand holding as follows:

"I have gone through the case records. The point for determination is whether credit on 'floor mat' is allowed. The appellants have contested that the floor mats are not manufactured in running lengths but are designed and manufactured to their specifications and that even if it is to be considered as accessory, if supplied with the motor vehicle and of which the value is included in the A.V., it is an input eligible for credit of duty under Rule 57A of Central Excise Rules, 1944. I observe that the Assistant Collector has not given any findings/reasons on the above submissions already