1996 (4) TMI 245 - AT - Central Excise

Summary

Issues:
Admissibility of toughened glass screen as an input for Modvat credit on television sets.

Detailed Analysis:

Issue 1: Admissibility of toughened glass screen as an input for Modvat credit on television sets

The case revolved around the admissibility of toughened glass screens fitted to televisions manufactured by the assessee for Modvat credit. The original authority and the Collector (Appeals) held that the toughened glass screens were optional accessories, not essential for the functioning of the TV sets, and denied Modvat credit. The appellant argued that the toughened glass screens were integral parts of the televisions, not optional accessories, as they were compulsorily supplied with all television sets. The appellant contended that the value of these screens was included in the assessable value of the final product. The appellant also cited various judgments to support their argument that essentiality should not be a determining factor for Modvat eligibility. The Tribunal analyzed Rule 57A, which did not distinguish between raw materials, component parts, or accessories, and noted that an amendment expanded the scope of inputs to cover goods used directly or indirectly in the manufacturing process. The Tribunal held that the toughened glass screens were inputs in the manufacture of televisions and overturned the original authority's decision, allowing the appeal.

In conclusion, the Tribunal found that the toughened glass screens were inputs in the manufacture of televisions as per the relevant rules, and the denial of Modvat credit on duty paid for these screens was deemed incorrect. The Tribunal set aside the original authority's order and allowed the appeal.