1993 (7) TMI 183 - AT - Central Excise

Summary

Issues: Determination of eligibility for modvat credit on miniature circuit breakers.

The issue in the appeal filed by the Revenue was the eligibility of the respondents, engaged in manufacturing miniature circuit breakers, to avail modvat credit for processes like calibration, testing, and final packing. The Assistant Collector disallowed the credit, stating that the processes did not result in a new article. The lower appellate authority disagreed, emphasizing the necessity of the processes for marketability.

The Appellate Tribunal considered the arguments presented by both parties. It was noted that calibration and testing were essential processes to make the MCBs marketable, as per the ISI standard 8828-1978. The Tribunal referred to Note 6 to Section XVI of the Central Excise Tariff, which states that converting an incomplete article into a finished one amounts to manufacture.

Consequently, the Tribunal concluded that the processes of calibration and testing undertaken by the respondents constituted manufacturing. Therefore, the Tribunal upheld the decision of the lower appellate authority, confirming the eligibility of the respondents for modvat credit and rejecting the Revenue's appeal.