1995 (6) TMI 134 - AT - Central Excise

Summary

Issues:
- Eligibility for Modvat benefit in relation to Lead Ingots used for manufacturing Rubber Hose Pipes.

Analysis:
1. The appeal was filed against an order allowing Modvat benefit to a company for Lead Ingots used in manufacturing Rubber Hose Pipes. The Assistant Collector disallowed the credit, considering Lead Ingots as appliances for shaping the final product, not inputs. The Collector (Appeals) disagreed, citing precedents and Rule 57A of Central Excise Rules.

2. The appellant argued that Lead Ingots were used as molds for shaping the final product, not as inputs. They distinguished a previous case where Lead was consumed in the manufacturing process. The appellant sought to uphold the original order disallowing Modvat credit for Lead Ingots used as molds for Rubber Hose Pipes.

3. The Departmental Representative supported the appeal, referencing cases where Modvat credit was denied for materials used in manufacturing processes. The representative argued that Modvat credit should not be allowed for Lead Ingots used as molds in the production of Rubber Hose Pipes.

4. The respondents' counsel supported the order-in-appeal, stating it was based on a correct interpretation of the law. The counsel argued against interfering with the decision and requested upholding the order-in-appeal.

5. After reviewing submissions and authorities, it was found that Lead was used in the manufacturing process of Rubber Hose Pipes for coating purposes. The Lead coating was not considered a separate article but part of the manufacturing process. Precedents were cited where similar materials were deemed eligible for Modvat credit. The judgment upheld the order-in-appeal, allowing Modvat benefit for Lead Ingots used in the manufacturing process of Rubber Hose Pipes.