Consumable input for Modvat credit upheld where roller composition was used in manufacturing and not shown as machinery component.

Roller composition made of gelatine and animal glue, used in printing and lacquering tin sheets, was treated as a consumable input eligible for Modvat credit because it was periodically removed and replaced during the manufacturing process. The contention that it formed part of the printing machinery was rejected as it was not established to be a machinery component. As the dispute depended on factual appreciation of the item's use, no question of law arose for reference, and the reference application was dismissed, leaving the Modvat treatment undisturbed.

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Issues: (i) Whether roller composition used for printing and lacquering of tin sheets was a consumable input eligible for Modvat credit and not a component of the machinery; (ii) Whether the reference application disclosed any question of law.

Issue (i): Whether roller composition used for printing and lacquering of tin sheets was a consumable input eligible for Modvat credit and not a component of the machinery.

Analysis: The composition, made of gelatine and animal glue, was placed in a mould attached to the roller to secure uniform coating for printing and lacquering operations. It had to be periodically removed from the upper layer and replaced with fresh material. On that footing, it was treated as a consumable input required for the manufacturing process. The contention that it formed part of the printing machinery was rejected, as it was not shown to be a machinery component.

Conclusion: The issue was answered in favour of the assessee.

Issue (ii): Whether the reference application disclosed any question of law.

Analysis: The decision turned on factual appreciation of the material and its use in the machinery. No material was shown to justify treating it as a component of the machinery or to give rise to a legal question.

Conclusion: No question of law arose.

Final Conclusion: The reference application was dismissed, and the earlier view granting Modvat treatment to the roller composition was left undisturbed.

Ratio Decidendi: Where the disputed item is a consumable used in the manufacturing process and not established to be a component of machinery, the determination remains factual and does not raise a question of law for reference.

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