1991 (4) TMI 243 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit on plastic BOPP films used as a separating medium in the manufacture of decorative laminated sheets.

Analysis:
The five appeals before the Appellate Tribunal CEGAT, Bombay revolve around the common issue of whether Modvat credit is admissible on plastic BOPP films utilized as a separating medium in the production of decorative laminated sheets. The appellants argued that a previous order by the Bench in the case of Collector of Cen. Excise v. Weldekar Laminates Pvt. Ltd. supports their claim for Modvat credit. On the other hand, the respondents contended that the films should be considered as appliances, thereby disqualifying them from Modvat credit eligibility.

During the proceedings, the respondents referred to the Board's instructions from a specific letter, emphasizing the functional utility of the BOPP films as that of an appliance. However, the Tribunal, after considering arguments from both sides, maintained its stance established in the Weldekar Laminates Pvt. Ltd. case. The Tribunal highlighted that the Board did not delve into the classification of plastic films as appliances, tools, or instruments. In contrast, the Tribunal analyzed the definitions of appliances, apparatus, and equipment from recognized dictionaries to conclude that the films do not align with these definitions.

The Tribunal reasoned that a film, such as BOPP films in this case, cannot be categorized as an appliance unless it is converted into or used as part of an apparatus. The Tribunal emphasized that the films act as a separating medium in the lamination process, do not become appliances due to repeated usage, and are not integral parts of the final product. The Tribunal clarified that for Modvat credit eligibility, the inputs used should not fall under the excluded categories specified in the explanation to Rule 57A. Since both the final products and inputs were covered by the Modvat scheme notification, and the films did not meet the criteria of being tools, apparatus, or appliances, the Tribunal ruled in favor of the appellants.

In conclusion, the Tribunal allowed the appeals, granting the appellants the benefit of Modvat credit on the plastic BOPP films used as a separating medium in the manufacture of decorative laminated sheets.