TMI Blog1990 (1) TMI 201X X X X Extracts X X X X X X X X Extracts X X X X ..... an appeal against the order of the Collector of Central Excise (Appeals), Madras, dated 29-7-88. 2. The short point that arises for determination is whether the appellants are eligible to take MODVAT credit in respect of anti-rust and anti-corrosion oil which is applied on the finished tools. The learned lower appellate authority in this context has held as under: It is not used in manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e oil on the tools. He has pleaded that inasmuch as the oil was used in relation to the manufacture of the tools, the benefit of the MOD VAT credit in respect of the oil in question should be given. 4. The learned JDR for the Department opposing the plea adopted the reasoning of the learned lower authority as reproduced above. 5. The short point that arises for our consideration is whether aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89) 4 Supreme Court Cases 724, while examining the issue with reference to use of paper core for winding of the paper thereon, has held that the paper core can be considered as a component part of the paper for the following reasons: If it is found that the use of paper core is necessary in any process incidental or ancillary to the completion of" paper as marketable goods and it would consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of a manufactured product" used in the definition of the term manufacture in Section 2(f) of the Act and for the same reason paper core would also be constituent part of paper and would thus fall within the term component parts used in the notification insofar as manufacture of paper in rolls is concerned.".. It is observed that the Hon ble Supreme Court has held that the term process in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the tools and the accountal of the goods is also done after the application of the said oil. The very nature of the goods is such that these require to be protected from corrosion and rust, if they are to retain their utility and also for the reason of durability. In view of the above, following the ratio of the Hon ble Supreme Court s rulings in the cases cited supra, we hold that application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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