1998 (5) TMI 418 - AT - Indian Laws

Summary

Issues:
Determining whether Gravure Printing Cylinders used for printing laminated plastic film are intermediate products in the manufacturing process and whether the inputs used in their production are eligible for Modvat credit.

Analysis:
The main issue in this case revolves around the classification of Gravure Printing Cylinders (GPC) as intermediate products in the manufacturing process of printed laminated plastic film and the admissibility of Modvat credit for the inputs used in their production. The appellant argues that GPCs are captively used in the manufacture of printed laminated plastic film and are exempt under Notification No. 67/91, thus disallowing Modvat credit for inputs used in their production. Reference is made to previous Tribunal decisions regarding the treatment of sand moulds as non-intermediate products to support this argument.

On the other hand, the respondents contend that previous Tribunal decisions regarding the classification of sand moulds as intermediate goods are no longer applicable, citing the Rama Krishna Ind. case where sand moulds were considered intermediate products. They also refer to a judgment by the Madras High Court to support their argument. The respondents argue that GPCs can be considered intermediate products based on various legal interpretations and precedents, making the duty paid on inputs used in their manufacture eligible for Modvat credit.

The Tribunal, after considering the arguments presented by both sides, notes that GPCs are manufactured by the appellants and are primarily consumed captively. Drawing parallels with the treatment of sand moulds as intermediate products in a previous case, the Tribunal concludes that GPCs, when captively used in the manufacturing process, should be considered intermediate products. Therefore, the duty paid on inputs used in the manufacture of GPCs is deemed admissible for Modvat credit under Rule 57D(2). The Tribunal upholds the impugned order and rejects the appeals based on this analysis.

In conclusion, the judgment clarifies the classification of Gravure Printing Cylinders as intermediate products in the manufacturing process, making the duty paid on inputs used in their production eligible for Modvat credit. The decision is based on legal interpretations, precedents, and the specific circumstances of the case, ultimately favoring the respondents' position.