1997 (5) TMI 277 - AT - Central Excise

Summary

Issues:
Whether silicon oil, tungsten coil, and kiln wrap can be considered as inputs for Modvat credit under Rule 57A.

Analysis:
The appeal was filed by the Commissioner of Central Excise against the order allowing Modvat credit for silicon oil, tungsten coil, and kiln wrap used in the manufacture of Cathode Ray Picture tubes. The key issue was whether these items qualify as inputs under Rule 57A.

Silicon Oil:
The silicon oil is crucial for creating a vacuum in glass shells during the manufacture of Picture Tubes. It is used in a pump called a diffusion pump, which is essential for creating vacuum in the glass shells. The oil is replaced every 20-30 days, and the pump cannot function without it. The Tribunal held that the silicon oil qualifies as an input under Rule 57A as it is essential for the manufacture of picture tubes.

Tungsten Coil:
The tungsten coil is used to allow electric current to pass through, creating fusion temperature. It plays a vital role in the process of coating aluminum slug vapors on the glass shell. The coil gets consumed in the process and is considered an input that is necessary for the manufacturing process. The Tribunal upheld the decision to allow Modvat credit for the tungsten coil.

Kiln Wrap:
The kiln wrap is a thin plastic film used to protect glass panels from dust and scratches during handling in the manufacturing process. The Tribunal considered previous judgments and held that goods used until the final product is ready for marketing should be considered inputs. Since the kiln wrap is used before the completion of the final product and is not covered by any exclusion clause, it qualifies as an eligible input for Modvat credit.

Conclusion:
The Tribunal rejected the Department's appeal, affirming that silicon oil, tungsten coil, and kiln wrap are eligible inputs for Modvat credit under Rule 57A. The cross-objections were deemed non-maintainable as the impugned order was not against the respondents.