Modvat credit for accessories cleared with final product was admissible where syringes and needles formed part of the package.

Disposable syringes and needles cleared with injections as user-convenience accessories were treated as part of the final product package for Modvat purposes. Clause (e) inserted in Rule 57A recognised accessories of the final product cleared along with it, where their value formed part of the assessable value, as eligible inputs. On those facts, there was no basis to deny credit on the accessories, and Modvat credit was admissible.

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Issues: Whether disposable syringes and needles cleared along with injections as accessories of the final product were eligible inputs for Modvat credit under Rule 57A of the Central Excise Rules, 1944.

Analysis: The accessories were supplied along with the injections for the convenience of the user and were part of the final product package. Clause (e) inserted in Rule 57A recognised accessories of the final product cleared along with the final product, where their value formed part of the assessable value, as inputs for Modvat purposes. In the facts of the case, there was no justification to deny credit on such accessories.

Conclusion: The credit on disposable syringes and needles was admissible and the challenge raised by the Revenue failed.

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