1993 (12) TMI 157 - AT - Central Excise

Summary

Issues:
1. Denial of MODVAT credit for Argon Gas and Freon T-DA 35X by the Collector of Customs & Central Excise (Appeals), Bangalore.

Analysis:
The appellant claimed MODVAT credit for Argon Gas and Freon T-DA 35X, asserting they are used in the manufacture of tools and tool tips. The lower appellate authority denied the credit, citing unclear usage of the gases. The consultant argued that Argon gas creates an inert atmosphere in the furnace for processing carbide components, enhancing their properties. Similarly, Freon T-DA 35X is used as a drying agent to remove moisture from workpieces before dispatch. The consultant contended that both items qualify as inputs under Rule 57A of the Central Excise Rules. The consultant provided literature supporting the usage of Freon T-DA 35X as a drying agent.

The appellate tribunal examined the submissions and literature provided. It acknowledged that Argon gas is a technical necessity for providing an inert atmosphere during processing, crucial for enhancing the properties of carbide components. Therefore, the tribunal held that MODVAT credit for Argon gas must be allowed. Regarding Freon T-DA 35X, the tribunal noted its role as a drying agent to eliminate moisture from workpieces before market distribution. Recognizing the necessity to maintain high-quality tools free from moisture damage, the tribunal concluded that the use of Freon T-DA 35X is integral to the manufacturing process. Consequently, the tribunal allowed the appellant's plea for MODVAT credit on Freon T-DA 35X, granting consequential relief and allowing the appeal.