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TMI Blog1995 (11) TMI 151X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the sets with remote control unit can be operated only with the remote control unit and not otherwise. He rejected the contention that these sets are not marketable without the Remote Control unit as far-fetched. He also rejected the contention raised by the appellants relying upon the decision of the East Regional Bench reported in 1991 (32) E.C.R. 165 holding that tool kit and jack assembly are to be treated as inputs in respect of motor vehicles and referred to the contrary decision of the South Regional Bench reported in 1991 (56) E.L.T. 445. He, therefore, held that Remote Control itself is an accessory. Its manufacture is complete even without the dry cell batteries. He agreed with the finding of the Assistant Collector that the dry cell batteries are required only to make them function and not for manufacture of the Remote Control unit. He has then referred to the Trade Notices issued by the Madurai, Bombay-I and Madhya Pradesh Collectorates that it had been decided not to allow Modvat Credit on dry battery cells used in the manufacture of the electronic quartz clocks. He found no merit in the appeals, which he rejected upholding the orders of the Assistant Collector. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Control unit. The appellants have then submitted that the Department had insisted on considering dry cell battery as an essential part of VCR/VCP/Television sets and including their value in the value of the latter when these were assessed to duty on ad valorem basis. A totally contrary view cannot be taken when it comes to Modvat Credit. Lastly it has been submitted in the appeal that the Collector (Appeals) erred in basing his decision on the strength of Trade Notices. These have no legal force and, therefore, not binding. The orders passed by relying upon Trade Notices being bad in law, should be set aside. 4. The appellants were represented by Shri G. Sampath, learned Counsel. He reiterated the submissions urged in the appeal. He then referred to the Larger Bench decision of the Tribunal in the case of Collector of Central Excise, Jaipur v. Lipi Data Systems reported in 1995 (80) E.L.T. 542 (Tri.) = 1995 (10) RLT 33, wherein it had been held that Ribbons are eligible for Modvat Credit as inputs in the manufacture of line printers and contended that this decision would fully support their case. He also made available a copy of the said decision as also a copy of the Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted in the Larger Bench decision in the Lipi case that of more importance was the fact that Tool kits are not used in or in relation to the manufacture of the Motor vehicles and they are not necessary for making use of them. Only when some repair or attention is required at intervals after the vehicles are used for some time would the Tool kits be made use of. It was also noticed that one of the reasons which weighed with the Patna High Court in ruling that Modvat is not admissible for Tool kits was that Tools are specifically excluded from the definition of inputs in Rule 57A. It was noted by the Larger Bench with respect that the tools kept out of the definition of inputs under Rule 57A were the tools used for producing or processing of any goods, and the Tool Kits supplied with the Motor chassis are not used in such manner to attract the Modvat ban under the said provision. The role of battery cells used in the Remote Control unit supplied alongwith a VCR/VCP/Television set designed for use with such Remote Control is different from that of Tool kits supplied alongwith Motor vehicles. It is akin to the role of Ribbons used in Line Printer. The cells are required for the operati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... context that the decision of the West Regional Bench of the Tribunal in the case of Jayshree Industries v. Collector of Central Excise reported in 1993 (63) E.L.T. 492 becomes relevant. There, the issue was Modvat Credit for the cells supplied in Quartz Clocks. Note was taken of the Report of the Tax Reforms Committee chaired by Professor Raja Chelliah. Final Report Part I, Chapter 4, Para 4.11 wherein the specific case of dry cell used in Quartz Clock was cited as an example arising out of lack of understanding of the economic justification for extension of Modvat credit and a case of denial of relief at the officer s discretion. 8. I find that the position has now been made clear by the amendment of Rule 57A of the Central Excise (Ninth Amendment) Rules, 1995 whereby clause (e) has been added to the Explanation under the aforesaid Rule. The said clause reads accessories of the final product cleared along with such final product, the value of which is included in the assessable value of the final product . This would apparently take care of products assessed to duty on ad valorem basis. In the present case, I find from the pleadings before the Collector (Appeals) and his find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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