1997 (7) TMI 289 - AT - Central Excise

Summary

Issues: Modvat credit denial on inputs of miniature bulbs under Rule 57C and applicability of Rule 57D(2) for captively consumed intermediate products.

In this case, the appellants were engaged in manufacturing torches and miniature bulbs, with some bulbs manufactured by job workers. The dispute arose when the authorities denied Modvat credit on the inputs of miniature bulbs, claiming they were exempted final products under Rule 57C. The appellants argued that captively consumed miniature bulbs should be considered intermediates under Rule 57D(2) and thus eligible for Modvat credit. The lower authorities upheld the denial, leading to the appeal.

The appellant's representative contended that only captively consumed miniature bulbs were exempt from duty, while others were dutiable. He argued that Rule 57C did not apply to their case as Rule 57D(2) allowed credit for inputs used in manufacturing exempted intermediates further used in final products. Citing a previous decision, the representative urged the tribunal to allow the appeal.

The respondent reiterated the lower authorities' stance during the hearing. Upon review, the tribunal noted that captively consumed miniature bulbs were considered intermediates, falling under Rule 57D(2) rather than Rule 57C. The tribunal emphasized that Rule 57D(2) permitted Modvat credit for inputs used in manufacturing exempted intermediates for final products. Referring to a previous decision involving the same appellants, the tribunal found no reason to disagree and allowed the appeal, granting consequential relief as per the law.