1997 (5) TMI 283 - AT - Central Excise

Summary

Issues:
Whether the coupler purchased by the respondents and supplied along with cables to customers is entitled to Modvat credit.

Analysis:
The case involved a dispute regarding the eligibility of Modvat credit on couplers purchased by the respondents and supplied with cables to customers. The Department contended that the couplers were not essential inputs for the manufacturing process of wire and cable and were sent separately based on customer requirements, thus not integral to the final product. The Department argued that the couplers were accessories and not indispensable for the completion of the final product. They relied on Rule 57A and a previous Tribunal decision to support their position. The respondents, on the other hand, asserted that the coupler was an essential component used in manufacturing cables, as evident from customer orders where the value of the coupler was included in the assessable value of the final product.

The Appellate Tribunal referred to a previous order in the respondents' case where Modvat credit on the coupler had been allowed. The Tribunal noted that the value of the coupler was included in the final product's value, and duty was paid on the total assessable value. The Tribunal held that the goods supplied were not just wires and cables but included the coupler, making the coupler an integral part of the final product. As there was no appeal against the previous order, the Tribunal upheld the decision to allow Modvat credit on the coupler. The appeal filed by the Revenue was consequently rejected.