1994 (6) TMI 108 - AT - Central Excise

Summary

Issues:
1. Classification of Polyster film as an input for modvat credit.
2. Applicability of previous Tribunal decisions.
3. Interpretation of the term "inputs" under Rule 57A.

Analysis:

Issue 1: Classification of Polyster film as an input for modvat credit
The appellant, M/s. Hilton Rubbers Ltd., filed an appeal against the Addl. Collector's order, which denied modvat credit on Polyster film used in manufacturing Conveyor belts. The department argued that the film was not raw material but an appliance used in the manufacturing process. The appellant contended that the film was essential in vulcanization, preventing the belt from sticking to calender plates and providing a smooth surface. The Tribunal found that the film was consumed in the process and met the criteria of an input, allowing the appeal.

Issue 2: Applicability of previous Tribunal decisions
The appellant relied on previous Tribunal decisions in cases involving BOPP films to support their claim. The Tribunal clarified that its decisions have general applicability, contrary to the Addl. Collector's view that they were only applicable to specific units. By comparing the use of plastic film in the current case to BOPP films in previous cases, the Tribunal determined that the plastic film qualified as an input based on the principles established in earlier decisions.

Issue 3: Interpretation of the term "inputs" under Rule 57A
The Tribunal examined the definition of "inputs" under Rule 57A, which excludes certain items like machinery and equipment. By analyzing the nature of the plastic film and its consumption in the manufacturing process, the Tribunal concluded that it met the criteria of an input and did not fall under any exclusion category. Citing a decision of the Calcutta High Court on modvat credit, the Tribunal upheld the appellant's claim for modvat credit on the plastic film.

In conclusion, the Tribunal allowed the appeal filed by M/s. Hilton Rubbers Ltd., overturning the Addl. Collector's order and recognizing the plastic film as an input eligible for modvat credit based on its consumption in the manufacturing process and compliance with relevant legal criteria.