Modvat credit on battery cells in television remote controls allowed where the remote control was treated as dutiable excisable goods.

Duty paid on battery cells used in television remote control units was held eligible for Modvat credit because the remote control unit itself was treated as a dutiable excisable product. Its character as an accessory or component did not defeat credit entitlement, and whether the television could function without it was considered irrelevant. The operative test was that the product in which the battery cells were used had been cleared on payment of duty, so credit was available.

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Issues: Whether duty paid on battery cells supplied in the remote control units of television sets was eligible for Modvat credit.

Analysis: The remote control unit was treated as a dutiable excisable product, and the question whether a television set could function without it was held to be irrelevant to the eligibility of credit on the duty paid on the battery cells used in that unit. The reasoning proceeded on the basis that the accessory/component character of the remote control did not defeat credit entitlement when the product itself was cleared on payment of duty.

Conclusion: The duty paid on the battery cells used in the remote control units was eligible for Modvat credit.

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