1997 (4) TMI 209 - AT - Central Excise

Summary

Issues:
Admissibility of Modvat credit on Molywire used in electric bulb.

Analysis:
The appeal concerns the admissibility of Modvat credit on Molywire used in the manufacturing of electrical bulbs. The Department contended that Molywire is not an input as it dissolves during the manufacturing process, leaving behind the tungsten filament. A show-cause notice was issued, and the Additional Collector ruled that Molywire falls under the exclusion clause of Rule 57A, making it ineligible for Modvat credit. The ld. Collector (Appeals) upheld this decision.

Miss Ginny Bedi, representing the appellants, argued that their case aligns with a previous Tribunal decision and a clarification by the Central Board of Excise & Customs, which both support the admissibility of Modvat credit for Molywire used in electric bulbs. On the other hand, Shri Satnam Singh, the ld. SDR, reiterated the findings of the lower authorities.

Upon hearing both sides, the Tribunal referred to a previous case involving Kalpana Lamps and Components Ltd. where it was held that the use of wire for filament formation should not be considered as that of a tool. The Tribunal also cited various dictionaries to define terms like apparatus, appliance, and tool, concluding that Modvat credit should be available for items like wire-mesh. The Tribunal found no merit in the Revenue's argument and dismissed the appeal.

Furthermore, the Central Board of Excise and Customs clarified that Molywire is an input for electric bulbs. Considering the definition of appliance provided in the Kalpana Lamps case and the necessity of Molywire in bulb manufacturing, the Tribunal held that Modvat credit should be allowed for Molywire in electrical bulbs. Consequently, the impugned order was set aside, and the appeal was allowed, with any consequential relief deemed admissible to the appellants.