Modvat credit on molybdenum wire used in filament manufacture was allowed as it was not treated as an excluded tool.

Modvat credit was admissible on molybdenum wire used in the formation of tungsten filament for fluorescent tubes because the wire was a technical necessity in manufacture and was consumed in the process by dissolving into the filament. Applying the Larger Bench interpretation of the expressions "apparatus", "appliance" and "tool", together with the Board's clarification on wires as used, the Tribunal held that the wire did not fall within the exclusion under Rule 57A of the Central Excise Rules, 1944. The Revenue's objection therefore failed, and credit on the wire was allowed.

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Issues: Whether Modvat credit was admissible on molybdenum wire used in the formation of tungsten filament and whether such wire fell within the excluded category of apparatus, appliance or tool under Rule 57A of the Central Excise Rules, 1944.

Analysis: The use of the wire was found to be a technical necessity in the manufacture of fluorescent tubes, and the wire, after use, got dissolved in the filament formation process. The Tribunal applied the principles laid down in the Larger Bench decision on the scope of apparatus, appliance, tool and similar expressions, and followed the Board's clarification that credit would be available for wires as used. On that basis, molybdenum wire as used was held not to be covered by the exclusion for tools or similar items.

Conclusion: Modvat credit on the molybdenum wire was admissible and the Revenue's objection failed.

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