1996 (11) TMI 175 - AT - Central Excise

Summary

Issues:
- Eligibility for Modvat credit on various input items used in the manufacture of printed circuit boards.

Detailed Analysis:

1. The appellants, engaged in manufacturing printed circuit boards, sought Modvat credit for various input items. The Assistant Collector disallowed Modvat credit for 11 items, leading to an appeal before the Collector (Appeals) who upheld the decision. Subsequently, the appellants appealed to the tribunal.

2. The tribunal noted the requirement under Rule 57A that both inputs and final products must be specified, and inputs should be used in or in relation to the manufacture of final products. The rule excludes certain items like machinery. The tribunal examined the nature and use of the disputed input items.

3. Bakelite sheets and aluminium clad entry foil were considered. The Collector (Appeals) deemed them as consumable tools not eligible for Modvat credit. However, the tribunal found these items were consumed in the manufacturing process and were not classified as tools. Hence, they were eligible for Modvat credit.

4. Tungston Carbide/Solid Carbide Drill Bits were categorized as tools falling under the excluded category, and the tribunal agreed with the Collector (Appeals) that Modvat credit was not admissible for these items.

5. The Screen Mesh of Polyester was found essential for printing design in manufacturing printed circuit boards. As it was not listed in the exclusion clause of Rule 57A, the tribunal allowed Modvat credit for this item.

6. Acid Degreaser Cuprolite H-83 and Cuprolite x-84 were acknowledged as used in the manufacturing process of printed circuit boards. Since they were not in the excluded category, Modvat credit was deemed admissible for these items.

7. Glazed Transparent Paper, Gummed, or adhesive paper/rolls were used for packing to make the final product marketable. Citing the decision of the Apex Court, the tribunal allowed Modvat credit for these items as they were considered to be used in or in relation to the manufacture of the final product.

8. In conclusion, the tribunal modified the impugned order, allowing Modvat credit for specific input items as discussed. The decision provided for consequential relief to the appellants in accordance with the law.