Admissibility of Modvat credit on cut tyres and tubes - Clarification regarding - Central Excise - 11/88-CX.8

Admissibility of Modvat credit on cut tyres and tubes - Clarification regarding Circular. No. 11/88-CX.8 Dated 13-5-1988 [From F. No. 261/40/4/87-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Admissibility of Modvat credit on cut tyres and tubes - Clarification regarding. I am directed to say that doubts have been raised as to whether Modvat credit on inputs used in the manufacture of cut tyres and tubes which are specifically exempted under Notification No. 76/86-C.E., dated 10-12-1986 is permissible or not. The matter has been examined by the Board in consultation with the Law Ministry. It has been observed that "Cut tyres tubes" are "finished products" and cannot be treated as "Waste, refuse or by-product" arising during the manufacture of tyres and tubes. Modvat credit will therefore not be admissible by virtue of Rule 57C of the C.E. Rules, 1944. The Board has therefore decided that Modvat credit availed on inputs contained in cut tyres and tubes would not be admissible. The practice of allowing Modvat credit on inputs used in cut tyres and tubes may be stopped forthwith. Such credit availed, if any, may also be expunged/recovered immediately. The above instructions may be brought to the notice of the field formations Receipt of this letter may please be acknowledged.