1997 (3) TMI 269 - AT - Central Excise

Summary

Issues:
Modvat credit eligibility for button cells used in electronic calculators under Rule 57A of Central Excise Rules, 1944.

The judgment concerns an appeal filed by the Collector, Central Excise, Meerut challenging the order of the Collector (Appeals) regarding the eligibility of modvat credit for button cells used in electronic calculators. The respondents, manufacturers of calculators, claimed modvat credit on inputs including button cells and LCD Display Tubes. The Collector (Appeals) allowed the credit, considering button cells essential for calculator operation and LCD Display Tubes as a typographical error. The Revenue disputed the decision, arguing that button cells are not integral to the calculator's functioning. The Tribunal referred to previous decisions, including Jayshree Industries Ltd. v. CCE, where dry battery cells in clocks were deemed essential components for operational need and marketability. The Tribunal emphasized the criteria under Rule 57A, stating that if an item is necessary for the gadget's operation, supplied with the gadget at the factory gate, and included in the gadget's value, modvat credit should be allowed. Citing BPL Sanyo Ltd. v. CCE and CCE v. Swaraj Mazda, the Tribunal concluded that button cells qualify as inputs for modvat credit in electronic calculators. Consequently, the appeal was dismissed, upholding the Collector (Appeals) decision on modvat credit eligibility for button cells.

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