2001 (4) TMI 303 - AT - Central Excise

Summary

Issues:
Challenge against grant of Modvat credit on Wind Screen Wiper Kit & Wiper Motor.

Analysis:
The appeal was made against the grant of Modvat credit on Wind Screen Wiper Kit & Wiper Motor, contending that these items were not essential accessories to the chassis manufactured by the assessee. The Tribunal upheld the Commissioner's findings, emphasizing the essential nature of these items for the functioning and safety of a motor vehicle. The Tribunal noted that these items were crucial as per the Motor Vehicles Act and their non-fixing could lead to penalties. The Commissioner's reasoning was supported by previous Larger Bench decisions, including cases like Jawahar Mills v. CCE and Surya Roshini v. CCE. The Tribunal referred to various Supreme Court and High Court rulings to support the decision. The Tribunal concluded that since the impugned items were essential for the running of the motor vehicle and their value was included in the final product, the Modvat credit could not be denied. Therefore, the appeal against the grant of Modvat credit was rejected.

The appellant argued that just because the value of the impugned items was added to the value of the motor vehicle chassis, it did not necessarily mean that these items were in or in relation to the manufacture of the chassis. However, the Tribunal agreed with the Commissioner's findings that these items were indeed essential for the operation of a motor vehicle. The Tribunal highlighted that the value addition to the final product and the essential nature of the items for the functioning of the vehicle were crucial factors in determining the eligibility for Modvat credit. The Tribunal also cited relevant case laws, such as the Larger Bench decisions in the cases of Jawahar Mills v. CCE and Surya Roshini v. CCE, to support the decision. The Tribunal emphasized that the practical and safety aspects of these items for a motor vehicle were undeniable, leading to the rejection of the appeal and upholding the grant of Modvat credit.

In summary, the Tribunal dismissed the appeal challenging the grant of Modvat credit on Wind Screen Wiper Kit & Wiper Motor. The decision was based on the essential nature of these items for the functioning and safety of a motor vehicle, as highlighted by the Commissioner's findings and supported by relevant legal precedents. The Tribunal emphasized that the inclusion of the value of these items in the final product and their necessity for the operation of the vehicle justified the extension of Modvat credit, leading to the rejection of the appeal.