S.V. ELECTRICALS LTD. Vs. CCE

JUDGEMENT

(1.) WE have been called upon to decide on an issue referred by the Northern Bench (S) of this Tribunal in view of conflicting decisions on the issue by Two Member Benches. The issue is whether a plain Molybdenum wire used in the manufacture of Tungsten filament falling under Heading 85.39 of the Central Excise Tariff Schedule is an input eligible for Modvat credit under Rule 57A of the erstwhile Central Excise rules 1944 for the period December, 1996 to July, 1997. The appellants were engaged in the manufacture of electric filaments viz. Tungsten filaments falling under the above Tariff Heading, during the above period of dispute. They used Molybdenum wire in the manufacture of Tungsten filament in the following manner: - -Tungsten wire of the required size was wound tightly around a Molybdenum wire of pre -determined size on a Primary Coiling Machine with the pitch requisitely adjusted. The coil so produced on the primary coiling machine was called primary coil. The primary coil was then converted into a secondary coil by coiling the primary coil around another thick Molybdenum wire. The Molybdenum wires were then removed by treatment of the coil system with an acid mixture in which the Molybdenum wires dissolved leaving behind the coiled Tungsten filament which was ready for use in a lighting system.

(2.) HEARD both sides.

(3.) LD . Counsel for the appellants submitted that, in Circular No. 267/63/91 -CX.8 dated 30.12.1992, the Central Board of Excise and Customs had clarified that Molybdenum wire used for the manufacture of Tungsten filament could not be considered as a tool or mould and was eligible for input -credit under Rule 57A as it could appropriately be described as a consumable used in relation to manufacture of Tungsten filament. The Board's circular was binding on the Revenue and, therefore, it was not open to the respondent to argue against what had been laid down by the Board. The counsel, in this connection, relied on the following decisions of the Supreme Court: - -