INSULATORS AND ELECTRICALS CO. Vs. CCE

JUDGEMENT

(1.) The appellant filed this appeal against the Order -in -Appeal passed by the Commissioner (Appeals) whereby the benefit of Modvat credit was disallowed in respect of polythene sheet as input on the ground that polythene sheet does not take part in the process of manufacture of final product.

(2.) The appellants are engaged in the manufacture of Electrical Insulators and contention of the appellant is that these polythene sheets are used to cover the pugs to prevent the loss of moisture and these pugs are not covered with the polythene sheets. Some cracks will appear in these pugs due to loss of moisture. In case there are some cracks in the pugs then they become unsuitable for the manufacture of insulator. The appellant relied upon the Rule 57A during the relevant period to submit that Rule provides where the goods are used in or in relation to the manufacture of final product whether directly or indirectly and whether contained in the final product or not.

(3.) The contention of the Revenue is that polythene sheets are not used directly in the manufacture of the final product and final product can be produced without use of polythene sheets.