PRICOL LTD. Vs. CCE

JUDGEMENT

(1.) THE appellant is a manufacturer of speedometers. During the period 1999 -2000 they also got six screen printing machines which they further manufactured by adding motors, gear boxes, bearings, V -belts, chains etc. to make it electrically operated. One of the finally manufactured machine was cleared on payment of excise duty, three such machines were cleared under Notification No. 108/95 -CE and two machines were captively consumed within the factory. Revenue was of the view that the appellant could not have taken CENVAT credit on the partly finished screen printing machine received in the factory. The reasoning adopted by Revenue was that it was not an input under Rule 57A(4) of Central Excise Rules 1944 and therefore Revenue proposed to deny the CENVAT credit on such screen printing machines amounting to Rs. 70,480/ -.

(2.) THE learned counsel for the appellant submits that the eligibility for credit is clearly laid down under Rule 57B of Central Excise Rules, 1944, as it existed at the relevant time. The situation under consideration is covered by Rule 57B(2) of the said Rule which is reproduced below: -

(3.) OPPOSING the prayer, the learned AR submits that once the goods were classified as machines capable of performing an independent function of screen printing it could no longer be considered as an input. The purchase order shows that the equipment brought into the factory was capable of performing independent function and therefore by no stretch of imagination this could be considered as input. He also submits that Rule 57B (2) is not applicable because the goods brought in were not parts but complete machines. Considered submission of both sides. We note that goods which are final products in the hands of one person can be an input in the hands of another person who is further processing the goods by another manufacturing process. The Section Note 6 of Section XVI clearly lays down that process of the type done by the appellant amounts to manufacture. In view of this position, we do not find any merit in the argument of Revenue. Hence the orders of the lower authorities are set aside and the appeal is allowed.