CCE Vs. JOYCO INDIA PVT. LTD.

JUDGEMENT

(1.) In this appeal, the issue relates to the availability of the modvat credit to the respondents on the rubber gloves under Rule 57 -A as inputs.

(2.) I have heard both sides. The perusal of file shows that the respondents are engaged in the manufacture of Chewing Gum and other confectionary items falling under Chapter Heading 1704 of the CETA. The Rubber Gloves are being used by their workers while working in the factory for manufacturing the above said goods. The adjudicating authority disallowed the modvat credit holding the same to be not an input under rule 57A and confirmed the demand of Rs. 48,706/ - with penalty of Rs. 10,000/ - on the respondents though the Order -in -Original. The Commissioner (Appeals) has reversed the order by holding that these gloves are being used by the workers of the respondents for the protection of their hands as well as the protection of the goods from contamination. The learned counsel has relied upon the ratio of the law laid down in the case of Samtel Electron Devices Ltd. Vs. CCE, Meerut, 2002 (147) ELT 469, wherein the Modvat credit was allowed on the finger tips used for manufacture of electron guns, sensitive equipment. She has also referred to the Apex Court judgment in the case of Member Board of Revenue as Phelps Co. P. Ltd. 1972 (29) STC 101, wherein it was observed that use of the Gloves was essential by the workmen being engaged in the hot jobs or in handling corrosive substance. Another judgment of the Apex Court referred to by the learned counsel is in the case of J.K. Cotton Spinning and Weaving Mills Ltd. Vs. Sales Tax Officer, Kanpur, 1997 (91) ELT 34, wherein it has been observed that where a particular process is so integrally connected with the ultimate production of the goods and but for that process, the manufacture of the goods would be commercially inexpedient, goods required in the process will fall within the expression "in he manufacture of goods".

(3.) But, in my view,the contention of the learned counsel cannot be accepted. The appellants as observed above, are engaged in the manufacture of only Chewing Gum and other confectionary items which can not be, in any manner, said to be sensitive or corrosive substance not handable without the use of the hand gloves. It also cannot be said that without the use of the hand gloves, the manufacture of the Chewing Gum would, in any manner, be commercially inexpedient. The plea of the appellants that for high quality purposes, the use of the gloves is required by the workmen, otherwise, the chewing gum will not be commercially marketable, is also wholly mis -conceived. The gloves have not role to pay in on in relation to the manufacture of the chewing gum, and the same cannot be said to be, in any manner, input for claiming the modvat credit under Rule 57 -A. Without the use of the gloves, the gums can be manufactured in a factory and high standard can be maintained. Under Rule 57 -A the modvat credit on the input is available to an assessee only if the inputs have got some relation in the manufacture of the final products. The ratio of the law laid down in the case of Samtel Electron Devices Ltd., supra, is not attracted to the facts of the present case. In that case, the finger tips were used by the workmen for the manufacture of the Electron Guns which were sensitive equipment and could not be handled bare handed. Similarly, the ratio of the law laid down in the case of Member Board of Revenue Vs. Phelps Co. P. Ltd. and J.K. Cotton Spg. and Wvg. Mills, supra, is not of any help to the respondents in this case. Those cases were under the Sales Tax Act and no issue of availability of modvat credit to the assessee was involved therein. Moreover, in those cases, the assessee were engaged in the manufacture of Hot Job and the workmen were required to handle corrosive substances. But, in the instant case, hand gloves cannot be treated as integral part of process of manufacture of the final product by the respondents. Under no circumstances the hand gloves can be treated as inputs under Rule 57 -A of the Rules for allowing the modvat credit to the respondents.