Admissibility of Modvat credit on Dry Battery Cells used in quartz wall clocks and quartz timepieces - Regarding - Central Excise - 57/89-CX.8

Admissibility of Modvat credit on Dry Battery Cells used in quartz wall clocks and quartz timepieces - Regarding Circular No. 57/89-CX.8 Dated 29-12-1989 [From F. No. 267/169/88-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Admissibility of Modvat credit on Dry Battery Cells used in quartz wall clocks and quartz timepieces - Regarding. I am directed to say that representations have been received in the Board's office for allowing Modvat credit of duty paid on dry battery cells used in the manufacture of quartz clocks/timepieces. The matter has been examined by the Board. It is observed that :- (i) Battery cells are not required in the course of manufacture of quartz clocks but are required only to run the same. (ii) The battery cells are used for operational functions and are more in the nature of accessories of clocks than inputs for the same. It has therefore been decided by the Board that dry battery cells cannot be regarded as inputs used in or in relation to the manufacture of quartz clocks/timepieces. Therefore Modvat credit cannot be permitted on the same. Practice, if any, of permitting Modvat credit on such dry battery cells for payment of duty on quartz clocks/watches may be stopped forthwith and credits wrongly taken, if any, may also be recovered. Trade and field formations may be informed suitable. Receipt of this letter may kindly be acknowledged.