CCE Vs. SCIENTIFIC SALES & SCIENTIFIC

JUDGEMENT

(1.) These are two appeals preferred by Revenue against the following two Orders -in -Appeal: Name of the Respondent Order -in -Appeal

(2.) Shri L.P. Asthana, learned Advocate, submitted that Cathode Ray Tubes are used in the manufacture of Oscilloscopes and Modular Measuring Instruments which are highly technical and scientific in nature and are subjected to vigorous testing during the production of these instruments; that testing of Cathode Ray Tubes have been carried out at various stages in the production Department i.e. before they are being fitted into the instruments as well as after being fitted; that if at any stage of the production, it is found that Cathode Ray Tubes are defective, the same is rejected as waste and scrap; that Modvat Credit is available to them since such rejection is in course of manufacturing activity and as per Rule 57 -D Modvat Credit cannot be varied or denied on the ground that part of input has gone waste.

(3.) The learned SDR also mentioned that the Additional Commissioner has confirmed the demand of duty in respect of parts of Oscilloscope used for replacing in instruments received for repair by M/s. Scientific Sales; that the Commissioner (Appeals) has accepted the contention of the Respondent No. 1 about the rate of duty and ordered that duty should have been calculated @ 5% Advalorem since the Respondent No. 1 is eligible for small scale industry exemption; that the duty payable by the Respondent No. 1, in terms of Rule 57F(1), would be equal to the amount of Credit availed by them in respect of inputs used for repairing the instruments. We agree with the submissions of the learned SDR that when the inputs are removed as such, the duty of excise shall be the amount of Credit that has been availed in respect of such inputs under Rule 57A of the Central Excise Rules, 1944.