Customs, Excise and Gold Tribunal - Delhi
Collector Of Central Excise vs Indo Asian Fuse Gear Ltd. on 29 July, 1993
Equivalent citations: 1994ECR275(TRI.-DELHI), 1993(68)ELT207(TRI-DEL)
ORDER Jyoti Balasundaram, Member (J)
1. The eligibility to mod-vat credit on miniature circuit breakers manufactured by the respondents herein is the issue for determination in the above appeal filed by the Revenue. The respondents are engaged in the manufacture of miniature circuit breakers falling under Sub-heading 8536.90 CETA 1985 and are availing modvat facility. During the period June 91 to October 91 they received 81596 pieces of MCBs of 16 Amps. from M/s. Indo Kopp (P) Ltd., Noida for further processing i.e. calibration, testing, inspection and final packing and availed modvat credit of Rs. 4,16,892.48 under Rule 57A of the Central Excise Rules, 1944. The Assistant Collector disallowed the modvat credit on the ground that the processes carried on by the respondents in their factory do not amount to manufacture as no new or different article emerges as a result of the processes and to avail of modvat credit, manufacture is an essential requirement. The lower appellate authority set aside the order of the Assistant Collector holding that the processes undertaken by the respondents were necessary to make the product marketable. Hence this appeal.
2. We have heard Shri V.C. Bhartiya, learned DR and Shri V. Lakshmikumaran, learned Advocate and carefully considered their submissions.
3. The processes of calibration and testing are carried out in order to make the MCBs a marketable product. The I.S.I. standard 8828-1978 also lays down that the MCB is to be calibrated. The gate passes covering the inputs describe them (as MCBs - 16 Amp. - unfinished) for further processing. The learned DR does not dispute that calibration is essential for marketability of the item. Further Note 6 to Section XVI of the Central Excise Tariff sets out as follows:
"In respect of goods covered by this Section, conversion of an article which is incomplete or unfinished but having the essential character of the complete or finished article (...) into complete or finished article shall amount to manufacture."
4. In view of the above, the processes of calibration, etc. carried out by the respondents amounts to manufacture.
5. In the light of the above discussion, we see no reason to interfere with the order of the Collector (Appeals) and accordingly we confirm the same and reject the appeal as already announced in open court.