Admissibility of Modvat credit on Oxygen and Acetylene gases - Regarding - Central Excise - 31/90-CX.8

Admissibility of Modvat credit on Oxygen and Acetylene gases - Regarding Circular No. 31/90-CX.8 Dated 31-5-1990 [From F.No. 267/108/89-CX.8] Government of India Central Board of Excise Customs New Delhi Subject : Admissibility of Modvat credit on Oxygen and Acetylene gases - Regarding. I am directed to refer to Board's instructions issued vide Circular No. 22/88, dated 24-5-1988 disallowing Modvat credit on Oxygen and Acethylene gases when used for cutting runners and risers on castings and for welding purposes. Trade have represented that Modvat credit on Oxygen and Acetylene gases should not be denied because aforesaid gases are used as essential inputs in the process of manufacture and are actually consumed in the process. The matter has been examined in a full Board meeting. It was decided to consult DGTD in the matter. Accordingly DGTD was consulted who has opined that Oxygen and Acetylene gases are used as a source of heat and flame generation for welding and cutting of metals and hence can be considered as consumables in the process of manufacture. The matter has been further considered by the Board keeping in view the opinion of DGTD. It has been decided in supersession of Board's instruction dated 24-5-1988 that Modvat credit on the oxygen and acetylene gases used for cutting runners and risers in the castings and for welding purposes and similar process of cutting and welding should be permitted. All pending cases may be decided on the basis of revised instructions. Trade and field formations may be informed suitably.