MODVAT meeting held at Bombay on 14-9-1989 - Point No. 26 Disallowance of Modvat Credit on Spot Welding Electordes/Tips Regarding - Central Excise - 3/92-CX.8

MODVAT meeting held at Bombay on 14-9-1989 - Point No. 26 Disallowance of Modvat Credit on Spot Welding Electordes/Tips Regarding Circular No. 3/92-CX.8 Dated 28-1-1992 [From F. No. 263/70/89-CX.8] Government of India Central Board of Excise Customs New Delhi Subject : MODVAT meeting held at Bombay on 14-9-1989 - Point No. 26 Disallowance of Modvat Credit on Spot Welding Electordes/Tips Regarding. Attention to Board's Circular No. 32/88-CX.8, dated 15-7-1988 (F. No. 267/81/88-CX.8) and Circular No.54/89-CX.8, dated 4-12-1989 (F. No. 263/49/89-CX.8) wherein it was clarified that spot welding electrodes/tips are non-consumable and are more in the nature of tools or appliances and should not be treated as 'inputs' in view of the explanation under Rule 57A of the Central Excise Rules, 1944. Hence the Modvat Credit is not available on 'Spot Welding Electrodes/Tips'. 2. During the Modvat meeting held at Bombay on 14-9-1989, it was contended that spot welding comprised of two processes i.e. welding and resistance welding. While resistance welding electrodes worked marely as conductors of electricity are welding ones become part and parcel of the final product and should be treated as 'inputs'. 3. Since the Board's instructions dated 4-12-1989 were issued in consultation with the Dy. Chief Chemist, C.R.C.L., New Delhi, the matter was again referred to the Chief Chemist, C.R.C.L. for his opinion. He opined that spot welding process is a resistance welding process whose basic function is to act as a conductor of electricity. They do not form part of the welded product and should not be confused with arc welding electrodes which melt and become part and parcel of the weld acting as a filler metal. The Chief Chemist viewed that spot welding electrodes cannot be considered as 'inputs' under Rule 57A. 4. In view of the above, the instructions contained in Board's letters referred to in para 1 above are reiterated. 5. This disposes of C.C.E., Ahmedabad's letter F-No. CH.85/19-115/MP/89, dated January, 1990.