TMI Blog2003 (12) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturing process. 2.The appellants are, inter alia, engaged in the manufacture of pistons, piston rings, pins and engines valves falling under Chapter sub-heading No. 8409.00 of the Central Excise Tariff Act, 1985. These items are supplied to various OE manufacturers, who further make use of them in the manufacture of final products, namely, parts of motor vehicles, etc. It is the case of the appellants that the piston rings manufactured by them is tailor made to specific requirements of the OE manufacturer-buyers. One particular set of rings can be made use of only for a particular vehicle model. For example piston rings made and meant for Maruti Zen model vehicles cannot be made use of in Maruti Esteem model. 3.The appellants import ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice. The Commissioner (Appeals) also rejected the case put forward by the assessee. He took the view that the appellants are not carrying out any manufacturing activity on the imported rings. These rings are complete finished products, which are sold in the same form along with the rings manufactured by them. Appellant was carrying out only the trading activity and therefore, is not entitled to take credit of the duty paid on the rings imported. 5.The learned Counsel for the appellants points out that there is no dispute raised by the Revenue that the appellants have discharged duty liability on the higher value on the piston ring set. If that be so, there is no reason for denying credit of the duty paid on input rings to make such set. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dertaken by it does not amount to manufacture and the imported ring is to be considered as an accessory when it is cleared in one pack along with other manufactured rings. Modvat credit is still available to the assessee under Rule 57B. It provides that Modvat credit can be taken on the accessories of final product which is cleared along with final product and its value is included in the value of the final product. 8.The learned DR contended that the process undertaken by the assessee will not come within the definition of the term 'manufacture' under Section 2(f). Therefore, according to the Revenue, assessee is not entitled to take credit of the duty paid on the rings imported. 9.We find merit in the contention raised by the appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it. If at all, the position is more liberal with regard to input credit, as it allows credit in respect of any item used in or in relation to the manufacture. We, therefore, hold the finding on this score to be wholly illegal and set aside the duty demand on this score also." 11.The appellants are on good ground in their contention that, they are entitled to take credit under Rule 57B, even if their activity does not amount to manufacture. Rule 57B during the relevant time reads as follows :- "Rule 57B. Eligibility of credit of duty on certain (inputs). - (1) Notwithstanding anything contained in Rule 57A, the manufacturer and final products shall be allowed to take credit of the specified duty paid on the following inputs used in or in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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