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TMI Blog1992 (6) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... he media surface. In other words, the function of a lap film is to evenly line the deposit of magnetic oxide for faultless recording of data. It is on this ground that lap film is claimed as an input component for the manufacture of a disk. Lap films when imported into India for the purpose of manufacture of Floppy diskettes" are exempt from import duty under Notification No. 347/86-Cus., dated 11-6-1986 in excess of 55% ad valorem subject to the following conditions, namely :- (a) an officer, inter alia of the Department of Electronics or of the Directorate of General Technical Development is satisfied that the goods in question are required for the purpose specified above and recommends grant of the above exemption. (b) the importer executes a bond with the Assistant Collector of Customs binding himself to pay, on demand, the duty leviable on goods as are not proved to have been used for the aforesaid purpose. 3. The appellants claim is that they have produced a Certificate dated 17-10-1990 from the Joint Director of the Department of Electronics which reads as under :- M/s. Allied Electronics and Magnetics Ltd., Udaipur has represented to this Department that your o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduct that is manufactured is lacking in smaller or larger measure as essential part whether it is colour, flavour, hardness, softness, odour or whatever was to be contributed by the missing ingredient from its total aggregation. [Collector of Central Excise v. HMM - 1985 (22) E.L.T. 810]. Shri Jitendra Singh submitted that in view of these decisions it is clear that it was not necessary for the Lap film to form part of the magnetic disk Similarly, a floppy disk even if it comes into existence would be lacking in its essential quality of evenness of surface without burnishing by a Lap film. The learned Counsel also cited the decision of the Supreme Court in the case of Collector of Central Excise v. Jay Engineering Works -1989 (39) E.L.T. 169 in which the Court held that anything used in making an article marketable would also be considered input for purposes of set-off under Notification 201/79-C.E. even if the article can perform essential functions without it. This was decided in the context of affixing name plates of brand name owners of electric fans manufactured by job workers. A similar view was taken by the Supreme Court in the case of Collector of Central Excise v. East E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. The Supreme Court also observed at p. 569: the expression in the manufacture" takes within its compass all processes which are directly related to the actual production." 8. Shri Jitendra Singh also cited the decision of the Tribunal in the case of Collector of Central Excise v. WeldekarLaminates Pvt. Ltd. - 1990 (49) E.L.T. 538 in which it was held that BOPP Film used in the manufacture of laminate sheets are not constru-able either as apparatus or an equipment or appliance even though used as separator between two layers of sheets to prevent them from sticking together and do not form part of the final product. He cited the following from the concluding part of the decision :- In the context of the scientific and technical meanings given in the recognised dictionary, the BOPP films which are nothing but films made of synthetic resins cannot be construed as either an apparatus or an equipment or an appliance. Even going by the normal understanding of the aforesaid terms, we are unable to be convinced that these films could be construed as apparatus, equipment or appliance. Moreover, seeing the samples produced of the films both before usage in lamination and after us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regarded as an input for purposes of Rule 57A. 12. Both the lower authorities have taken the view that because of its use in the burnishing machine, the Lap film becomes a tool and just as Modvat credit is not admissible to the machines in terms of Explanation to Rule 57A, Lap film which is a part of the machine is also not entitled to the credit. In order to see the validity of this argument we will have to refer to the Explanation itself which is as under :- Explanation. - For the purposes of this rule, inputs" includes - (a) inputs which are manufactured and used within the factory of production, in or in relation to, the manufacture of final products, and (b) paints and packaging materials, but does not include - (i) machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any changes in any substance in or in relation to the manufacture of the final products." 13. A plain reading of the Explanation shows that what are excluded from the purview of the Modvat credit are :- (a) Machines-.tools or appliances (i) used for producing or processing of any goods (ii) for bringing about ..... X X X X Extracts X X X X X X X X Extracts X X X X
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