MODVAT credit denied for tyre-making equipment used as manufacturing apparatus, not as inputs in the production process.

Air bags, bladders and shapers used in tyre manufacture were treated as manufacturing apparatus used to support green tyres during formation, not as inputs consumed in the manufacturing process, so they were held ineligible for MODVAT credit under the proviso to Rule 57A. Earlier orders cited by the applicant were found not to assist, because the distinction between materials used in manufacture and equipment used in manufacture remained applicable. The Tribunal found no mistake in the prior order and rejected the request for modification, leaving the MODVAT claim unsuccessful.

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Issues: Whether air bags, bladders and shapers used in the manufacture of tyres were eligible for MODVAT credit as inputs.

Analysis: The goods were used only as support for green tyres during formation and were therefore in the nature of equipment used in manufacture rather than materials used in the manufacturing process. The earlier orders relied upon did not assist the applicant, and the distinction between utilisation in the manufacturing process and use as manufacturing apparatus was treated as applicable to the MODVAT scheme under the proviso to Rule 57A. The Tribunal found no mistake in the earlier order warranting modification.

Conclusion: The claim for MODVAT benefit failed, and the request for modification was rejected.

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