Central Excise - Admissibility of Modvat credit on 'cut tyres and tubes' - Clarification regarding - Central Excise - 57/89

Central Excise - Admissibility of Modvat credit on 'cut tyres and tubes' - Clarification regarding Circular No. 57/89 Dated 28-9-1989 [From F.No. 99/17/89-CX.3] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Central Excise - Admissibility of Modvat credit on 'cut tyres and tubes' - Clarification regarding. Attention is invited to Board's Letter F. No. 261/40/4/87-CX.8, dated 13-5-1988 . Doubts had been raised as to whether 'cut tyres and cut tubes' would be classifiable under heading no. 40.04 of the CET as 'waste', parings and scrap of rubber and whether the Modvat credit of duty paid on the inputs going into the manufacture of such cut tyres and cut tubes in the course of manufacture of tyres and tubes would be available under Rule 57D(1) or not. 2. The matter has been examined by the Board. The Board took note of the expression 'waste, paring and scrap' as mentioned in Note 6 to Chapter 40 of the Schedule to the Central Excise Tariff Act, 1985, and felt that such of the defective tyres/tubes as are not usable as such, and cut and sold as scrap/waste would appear to merit classification under Heading No. 40.04 of the Schedule to the Central Excise Tariff Act. 1985. 3. Accordingly, the Board is of the view that such of the cut tyres and tubes as are not definitely usable as such and which are disposed of as waste and scrap would be appropriately classifiable under Heading No. 40.04. 4. The Board also holds that since such cut tyres and cut tubes and nothing but waste and scrap, the credit of duty paid on inputs could not be denied or varied on the ground that part of the input is contained in such waste/scrap, by virtue of Rule 57D(1) of the Central Excise Rules, 1944. 5. The instructions contained in Board's F. No. 261/40/4/87-CX.8, dated 13-5-1988 may be treated to have been modified to the extent mentioned above. 6. The above guidelines may be brought to the notice of the lower field formations and the trade interest may also be suitably advised. 7. All pending assessment may be finalised on the above basis.