Judgment:
1. All the aforesaid five appeals involve consideration of the common issue viz. the admissibility of modvat credit on plastic BOPP films used as a separating medium in the manufacture of decorative laminated sheets. The aforesaid 5 appeals are directed against the orders of the Collector (Appeals) as per details below:Appeal No. Order of the Collector (Appeals) No. & date.---------- ------------------------------------------------E/225/89 BOM GSM-327/89-RK dtd. 23-2-1989.E/236/89 BOM GSM-473/89 RK dtd. 28-2-1989.E/433/90 BOM GSM-54/90 Rajkot dtd. 2-4-1990.E/566/89 BOM GSM-1214/89-RK dtd. 5-6-1989E/601/90 BOM GSM-1204/89-RK dtd. 5-6-1989 2. Shri N.C. Trivedi and Shri V.N. Desai, Advocates, for the appellants submitted that the issue raised in these appeals, is squarely covered by this Bench's order in the case of Collector of Cen. Excise v.Weldekar Laminates Pvt. Ltd. reported in 1990 (49) ELT 538 (Tri.) and hence they pleaded that they are entitled to get the benefit of this order and the Collector (Appeals) has erred in holding that these films are appliances and hence are not eligible for modvat credit.
3. Heard Shri Mondal and Shri Naik appearing for the respondent. Shri Mondal referred to Board's instructions contained in their letter dated 8-1-1990 reproduced in 1991 (32) ECR 36.
4. Shri Naik pleaded that though the BOPP films are placed between the layers, it only acts as a separator and the functional utility of this item is that of an appliance, and hence gets excluded because of the explanation to Rule 57A.5. After having considered the arguments advanced on both the sides, we find that we are not pursuaded to change our view, which we had already taken in the case of Weldekar Laminates Pvt. Ltd. reported in 1990 (49) ELT 538. The Board does not appear to have gone into the question as to how mere plastic films can be construed as appliances or tools or instruments. Whereas, we, in our decision, have gone into the meaning and definition of appliances, apparatus and equipments in the recognised dictionaries and have come to the conclusion that these films cannot fit in with any of the definitions and even otherwise a film cannot be construed to be an apparatus without being converted into an apparatus or used as a part of apparatus. The film is a film and known as such. If it acts as a separating medium in this case and gets worn out only after repeated usage, it cannot become an appliance, or apparatus on that ground. It is also an admitted fact that the film is placed directly in the product mix, and placed in between the layers. In the process of lamination, films act as a separating medium.
Merely because an input is capable of repeated use, it does not get barred under Rule 57A nor because it does not form an integral part of the final product, it ceases to be an input. The term used in Rule 57A is 'inputs used in or in relation to the [use] of the product'. The only bar is that it should not be hit by the explanation to Rule 57A.The other requirement is that both the inputs and final products should be specified in the relevant notification issued under the modvat scheme. Since it is not disputed that both the final products and the inputs are covered by the notification of the modvat scheme and also in view of our considered finding that these films cannot be construed to be tools, apparatus or appliances, they do not come under the excluded categories specified in the explanation to Rule 57A. Hence, we are not in a position to appreciate the argument that such plastic films are appliances and are to be excluded for modvat benefit. We, therefore, allow these appeals with consequential relief.