1995 (11) TMI 174

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....180/PN-85/88 (F. No. V-2 (84 CETA) 517/87), dated 1-9-1988, while Appeal No. 664/91 is against the order-in-appeal No. SDK-140.B.II/91 (F. No. V. 2 (73) 826/90), dated 4-7-1991. 3. The facts are not discussed herein because both the appeals are issue based appeals. The issue involved is, whether X-ray films used for testing welded pumps, reactors and other parts of various machines and equipments would be eligible for Modvat credit under Rule 57A of the Central Excise Rules. Both the appellants are engaged in the manufacture of various machineries like nuclear reactors, boilers, centrifugal etc. and as per the customers requirement, in the case of highly sophisticated machines, the welded parts are to be subjected to radiography tes....

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....control test. Any item used in the quality control test is not eligible for modvat credit as has been held by the South Regional Bench in the case reported in 1992 (62) E.L.T. 560. He also stated that X-ray films are inputs only for the X-ray machines and they cannot be said to be used in the manufacture of the final product. In that sense, it can also be held to be a part of the X-ray machine. He also pleads that if such testing materials are allowed Modvat credit, all items used in the R & D laboratories are eligible to Modvat credit. 6. We have considered the submissions made by both the sides. We find that both the appellants are engaged in the manufacture of machineries like nuclear reactor vessels, boilers etc. The laid down s....

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.... for detecting the defects in the final products in the line of manufacture before their clearance, which is insisted upon by the buyers. In the circumstances, we would not like to give any opinion on the availability of the Modvat credit on laboratory chemical, since X-ray films are not comparable to the laboratory chemicals brought in for use in R & D laboratories. In view of the aforesaid discussion, we find that the case law cited by the ld. advocate - Asco Industrial Corporation - would be applicable in this case. The other decision cited by the ld. JDR relates to the inputs used in quality control test. On this decision we might have some reservation for its acceptance, because if the quality control tests are required for marketing t....