1995 (11) TMI 183 - AT - Central Excise

Summary

Issues:
1. Classification of goods as "graphite jigs" under the exclusion clause in the Explanation to Rule 57A of the Central Excise Rules.

Analysis:
The judgment in this case revolves around the classification of goods described as "graphite jigs" under the exclusion clause in the Explanation to Rule 57A of the Central Excise Rules. The dispute arose when the authorities disallowed modvat credit on the duty paid for these goods, considering them as equipment or apparatus. The advocate for the Appellant argued that the graphite jigs were not in the nature of machinery or appliances, citing their classification under Chapter 38. However, the judge noted that the classification does not solely determine the nature of the inputs. The advocate also referenced a judgment from the Calcutta High Court but was countered by the judge, who considered the function and description of the item to conclude that it could be classified as an appliance or tool.

The advocate for the Appellant provided a detailed explanation of the function of the graphite jigs, demonstrating their application through photographs and samples. The graphite jigs are used in pairs, with a specific shape and design to fuse leads to a capsule containing a silicon chip, forming a diode. The process involves passing electricity through heating elements attached to the plates, which then fuse the leads to the capsule. Despite the advocate's argument regarding the finite lifespan of the jigs, the judge emphasized that the usability duration does not solely determine whether an item qualifies as machinery or appliance. The judge dismissed the argument that the item cannot be considered machinery due to its limited usage, highlighting that all machinery has a finite life span.

Additionally, the judge addressed the opinion provided by the Department of Electronics, noting that it cannot be considered an expert opinion regarding the classification of the goods. The judge emphasized that the department's opinion was factually incorrect and did not impact the classification of the graphite jigs. Ultimately, the judge dismissed the appeal, affirming the decision that the graphite jigs fell within the exclusion clause in the Explanation to Rule 57A of the Central Excise Rules, and therefore, the modvat credit on the duty paid for these goods was disallowed.