Modvat credit on fire extinguisher cylinders allowed where they were integral components, not packing cylinders for gases.

Cylinders forming part of fire extinguishers were treated as integral components of the final product, with their value included in the assessable value. They were distinguished from returnable cylinders used for transporting and packing gases because, after use, fire-extinguisher cylinders are destroyed or retained by the buyer. On that basis, the exclusion in Rule 57A for cylinders used for packing gases did not apply. Board clarification supported this interpretation, but could not narrow or expand the statutory scope. Modvat credit was therefore admissible.

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Issues: Whether cylinders forming part of fire extinguishers were entitled to Modvat credit or were excluded as cylinders for packing gases under the relevant explanation to Rule 57A.

Analysis: The cylinders were treated as an integral part of the fire extinguisher, with their value included in the assessable value of the final product. They were not comparable to returnable cylinders used for transporting and packing gases, since after use the cylinders in fire extinguishers are destroyed or retained by the buyer. The Board's clarification supported this distinction, and a clarification cannot restrict or enlarge the scope of the law.

Conclusion: The cylinders were not hit by the exclusion in Rule 57A and Modvat credit was admissible. The appeal succeeded.

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