Full Judgment
2. The facts of the case are that the Appellants are engaged in the manufactured of electrical bulbs. They purchase various inputs and avail the credit of duty paid on inputs under Modvat scheme. The Department alleged that Molywire was not an input in as much as during the process of manufacture of filaments tungsten wire is initially wound around Molywire and treated with acid in which Molywire gets dissolved and leaves behind the tungston filament. Accordingly a show-cause-notice was issued to the appeallants and the Additional Collector held that Molywire is an appliance and since appliance is covered by the explanation of the exclusion clause under rule 57A, therefore, it was not admissible to Modvat Credit. In appeal, the ld.Collector (Appeals) upheld the Order of ld. Additional Collector.
3. Miss Ginny Bedi Ld. Advocate appears for the appellants and submits that their case was fully covered by the decision of this Tribunal in the case of Collector, Customs & Excise v. Kalpana Lamps and also submits that in addition the Central Board of Excise & Customs in their Circular No.F. No. 267/63/91-C.E., dated 31-12-1992 clarified that Molywire used in an electric bulb is an input in as much as it gets consumed in one operation. The ld. Counsel therefore submits that since their case was fully covered by the decision of the Tribunal cited above as also by the clarification of the Board. Therefore the appeal may be allowed.
4. Shri Satnam Singh the ld. SDR reiterates the findings of the lower authorities.
5. Heard the submissions of both sides. We find that the Tribunal in the case of Collector, Central Excise v. Kalpana Lamps and Components Ltd. -1997 (91) E.L.T. 162 (Tribunal) in Para 2 of their decision held as under: "2. The learned JDR for the Department has pleaded that since the use of the wire is for formation of the tungsten filament the use should be taken to be as amounting to that of a tool. He has pleaded that the West Regional Bench in the case of Apar Ltd. v. Collector of Central Excise reported in 1993 (67) E.L.T. 364 has held that the benefit of Modvat credit would not be eligible. Subsequent to that issue as seen from the order of the West Regional Bench reported in 1995 (76) E.L.T. 92 (Tribunal) in the case of Jay Electric Ltd. v. Collector of Central Excise & Customs, the Board has issued instructions under F. No. 267/63/91-CD. 8 dated 30-12-1992 wherein the Board had clarified that for the wires as used the benefit of Modvat credit would be available. Normally in the case of divergence of views on an issue between the Benches we would be referring the matter to the Larger Bench, but since we find that after the decision of the Tribunal in the case of Apar Ltd. referred to supra, in case of felts and wires used in the paper making machinery the Larger Bench of the Tribunal in the case of Union Carbide India Ltd. v. Collector of Central Excise, Calcutta reported in 1996 (15) RLT 144 has taken into consideration the scope of the terms apparatus, appliance, tool, etc., and after taking into consideration the usages of the goods in question the Tribunal has held that the Modvat credit would be available in respect of the items like felt, cloth, wire-mesh, etc. Keeping this in mind we feel that the decision rendered in the case of Apar Ltd. may not be considered as good law. The use of the wire it is seen is a technical necessity for the formation of the filament and for that reason therefore the use of the wire being in or in relation to the manufacture of fluorescent tubes in which the filaments is used has to be accepted.
The only question that would survive is whether the molybdenum wire as it is used would fall with the excluded category of the items under Rule 57A. The scope of the term apparatus, appliances, etc., the items which are excluded from the purview of the Modvat credit will have to be read from the meaning of these items as set out in the various dictionaries which are referred to by the Larger Bench of the Tribunal in the case cited supra. In this regard the meanings of these as in the extracts from these dictionaries is reproduced below for convenience of reference.
McGraw Hill Dictionary of Scientific and Technical Terms, IV Edition: Apparatus : A compound instrument designed to carry out a specific function.
Appliance : A piece of equipment that draws electric or other energy and produces a desired work-saving or other result.
Equipment : One or more assemblies capable of performing a complete function.
Machine : A mechanical, electric or electronic device, a combination of rigid or resistant bodies having definite motion and capable of performing useful work.
Machinery : A group or parts of Machines arranged to perform a useful function.
Tool : Any device, instrument or machine for the performance of an operation.
Appliance : In general, any tool or machine that is used to carry out a specific task or produced desired result.
Machine : Any device that transmits or modifies energy, an assembly of inter related parts, each with a definite motion and separate function.
Machinery : A group of parts or machines that are arranged to perform a particular operating or machining function.
Plant : An engineering, a production facility, a factory, electric power station or the like.
Tool : A portable and usually hard-held instrument that is used to increase the efficiency of a work effort.
Apparatus : It means a collection or set of materials, implements or utensils for a given work, a complex device or machine or a set of tools, appliances, any complex instrument for a specific action or operation, machinery or mechanism.
Appliance : is generally considered to be any house hold or office utensil, apparatus or instrument or machine that utilizes a power supply, especially electric current e.g. vaccum cleaners, refrigeration, toaster, air-conditioner.
Machine : is a mechanical contrivance that modifies, utilizes or applies energy or force for a useful purpose or function. It includes every mechanical device or contrination of mechanical powers and devices used to perform some functions or and produces a certain effect or result.
Machinery : means machines in general or collectively; also the working parts of a machine, engine or instrument; as the machinery of a watch. The means and appliances by which anything is kept in action or a desired result is obtained; a system of parts adopted to a purpose.
Plant : is an all embracing term expressive of land, buildings, and the equipment of the business conducted on the premises. Plant is an entity itself, wholly distinct from the land, buildings, machinery and appliances which compose it.
Tool : An instrument of manual operation, like a human saw, plane, file or the like used to facilitate mechanical operations, as distinguished from an appliance moved by and regulated by machinery.
In our view the term 'tool' would not cover wire as it is used. We observe the principles laid down by the Larger Bench in the case referred to supra will equally apply to the facts of this case. We therefore hold following the ratio of the Larger Bench decision of the Tribunal and keeping in mind the instructions issued by the Board that the Modvat Credit would be available in respect of molybdenum wire as it is used we refrain the matter to the Larger Bench as the principles for grant of benefit of Modvat Credit in respect of the items which are used otherwise than apparatus, materials, etc., are well laid out now in the Larger Bench decision referred to supra and any further reference to Larger Bench in this regard will only amount to duplication. In this view of the matter we therefore find no force in the plea of the Revenue and dismiss the appeal.
6. We also note that the Central Board of Excise and Customs also has given a clarification that Molywire is an input for electric bulb.
Having regard to the definition of appliance provided in para 2 of the Judgment of the Tribunal in the case of Kalpana Lamps and Components Ltd. and having regard to the fact that the Tribunal had concluded that Molywire is an input, and taking into account that Molywire is essentially used and is necessary in manufacture of the bulb. Following the ratio of the judgment cited above we hold that Modvat Credit of duty shall be available on the use of Molywire in electrical bulbs. In the result impugned order is set aside and the Appeal is allowed.
Consequential relief if any, shall be admissible to the appellants.