Modvat credit denied for printer ribbons treated as accessories, not inputs used in manufacture of the printer.

Printer ribbons used in a printer attached to computers were not eligible inputs for Modvat credit under Rule 57A because they were treated as accessories rather than components of the printer. The Tribunal applied the principle that an item must form part of manufacture, or be used in relation to manufacture in the relevant sense, to qualify as an input. As the printer was complete without the ribbon and the ribbon only enabled printing, it did not go into the manufacture of the printer. The credit claim was rejected.

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Issues: Whether printer ribbons used in a printer attached to computers are eligible as inputs for Modvat credit under Rule 57A.

Analysis: The Tribunal held that the governing principle was whether the item formed part of the manufacture or was only an accessory. Relying on the Supreme Court's view that a ribbon is an accessory and not a component part of a typewriter, the Tribunal found that the printer is manufactured complete without the ribbon fitted in it. The wide expression "in or in relation to" did not assist the appellant because the ribbon merely enabled printing and did not go into the manufacture of the printer as such.

Conclusion: Printer ribbons were not eligible inputs for Modvat credit, and the claim was rejected.

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