2005 (11) TMI 280 - AT - Central Excise

Summary

Issues: Modvat credit for Electric bulbs and Rubber Strips

Modvat Credit for Electric Bulbs:
The issue at hand is whether Modvat credit should be granted for Electric bulbs falling under CSH 9405.00. The Commissioner (Appeals) granted the credit, noting that Electric bulbs fall under CH 85.39, which has a specific entry for granting Modvat credit. The Tribunal previously upheld the grant of Modvat credit for protective devices for electricity used in a factory. The Judge rejected the Revenue's plea, stating that Electric bulbs are essential for manufacturing the final product, hence eligible for credit under the definition of Capital goods covering Chapter 85. The appeal was dismissed, upholding the Commissioner's order.

Modvat Credit for Rubber Strips:
The second issue concerns Modvat credit for Rubber Strips falling under CSH 4008.29. The Commissioner (Appeals) allowed the credit, emphasizing that the rubber strips are used for installing live wires as a safety measure, essential for the cement industry. Citing a Tribunal ruling in a similar case, the Commissioner held that credit cannot be denied for items used in the factory as protective devices. The Judge found the grounds raised by the Commissioner (Appeals) satisfactory and in line with the previous Tribunal ruling. Therefore, the appeal was rejected, upholding the grant of Modvat credit for Rubber Strips.

In conclusion, the judgment upheld the grant of Modvat credit for both Electric bulbs and Rubber Strips, emphasizing their essential role in the manufacturing process and as protective devices in the factory. The decision was based on the specific entries for granting credit, the definition of Capital goods covering the relevant chapters, and the precedents set by previous Tribunal rulings.