Document Fragment View

Matching Fragments

7. The Collector (Appeals) has rejected the appeals, on the ground that the Remote Control unit itself is an accessory for the VCR/VCP/Television sets. To be an accessory of a final product is not a disqualification for Modvat purposes. The reliance placed by him upon the Supreme Court decision reported in 1991 (51) ELT 173 is not appropriate. The Supreme Court in that case (as referred to by the Additional Collector himself in his impugned order) had referred to stereo or air-conditioner designed and manufactured for fitment to a motor car while examining the issue as to what is an accessory. A car can be used without these items. Such is not the case with the Remote Control unit of a VCR/VCP/Television set. Here I do not agree with the rejection by the Collector (Appeals) of the submissions made by the appellants that these equipments with Remote Control unit are different from similar equipment but without such Remote Control units. The two items are treated as different products in the relevant exemption Notification. To say that the Remote Control unit itself is only as an accessory does not really solve the problem of battery cells and Modvat admissibility therefor. The dispute is not of the Modvat admissibility of the Remote Control unit itself vis-a-vis the complete article viz. VCR/VCP/ Television sets. Obviously, the Remote Control unit has been treated along with the equipment itself as part thereof. The problem has arisen only in respect of the battery cells used in the Remote Control unit which is used to operate the equipment in question namely VCR/VCP/Television sets. It is in this context that the decision of the West Regional Bench of the Tribunal in the case of Jayshree Industries v. Collector of Central Excise reported in 1993 (45) ECR 185 (T) : 1993 (63) ELT 492 becomes relevant. There, the issue was Modvat Credit for the cells supplied in Quartz Clocks. Note was taken of the Report of the Tax Reforms Committee chaired by Professor Raja Chelliah. Final Report Part I, Chapter 4, Para 4.11 wherein the specific case of dry cell used in Quartz Clock was cited as an example arising out of lack of understanding of the economic justification for extension of Modvat credit and a case of denial of relief at the officer's discretion.