1998 (5) TMI 133 - AT - Central Excise

Summary

Issues: Modvat credit eligibility for Kleenmold 170 lubricant in glass manufacturing process.

Analysis:
1. The issue in this case revolves around the eligibility of Modvat credit for Kleenmold 170 lubricant used in the manufacturing process of glass articles. The Assistant Commissioner initially denied the credit, citing a trade notice that stated the compound used to clean the mould is not eligible for credit as the mould itself is not considered an input. However, the Commissioner (Appeals) overturned this decision, leading to the present appeal by the Commissioner of Central Excise, Meerut.

2. The Departmental Representative argued that the order-in-appeal lacked justification for reversing the original decision and did not provide a detailed discussion on the merits. It was contended that the Assistant Commissioner's order should be reinstated. On the other hand, the Respondent's Consultant highlighted the specialized nature of Kleenmold 170, emphasizing its crucial role in ensuring the easy removal of glass articles from the mould without damage. The Consultant urged for the dismissal of the department's appeal and the upholding of the order-in-appeal.

3. The judgment acknowledged the absence of detailed reasoning in the order-in-appeal but noted that the Commissioner (Appeals) relied on a Tribunal decision regarding the admissibility of Modvat credit for lubricant oil in a different context. The Tribunal found that Kleenmold 170 directly contributed to the glass manufacturing process by facilitating the easy detachment of glass articles from the mould, preventing breakage or damage. This distinction from the lubricant oil used in machinery led to the conclusion that Modvat credit should be allowed for Kleenmold 170. The judgment upheld the order-in-appeal, dismissing the appeal filed by the Commissioner of Central Excise, Meerut.