1997 (10) TMI 368

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....lastic Extrusion Machine falling under Heading 8544 of the Central Excise Tariff Act, 1985. They obtained Central Excise L-4 for availing of Modvat credit of duty under Rule 57A of the Central Excise Rules. The department found that they were utilising Polypropelene & HDPE for the purpose of testing and trial of the final product i.e. plastic extrusion machines manufactured by them. Jurisdictional Assistant Collector, Central Excise Division-VI, Mumbai-II passed orders disallowing of Modvat credit on Prolypropelene and HDPE on the grounds that these products are not being used in relation to the manufacture of plastic extrusion machines as these materials are used for testing and trial of these machines after they are manufactured. The othe....

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....he testing of the machines has to be done at various stages to ensure that the product in its performance conforms to the customers' specifications. The Id. Counsel contended that this testing is part and parcel of the manufacturing process for production of the extrusion machines and without this testing the respondents will not be in a position to market the final product. The ld. Counsel relied upon the Larger Bench decision of the Tribunal in Union Carbide India Ltd. v. CCE, Calcutta - 1996 (86) E.L.T. 613 wherein the Larger Bench has held that the expression "used in relation to the manufacture" of the final product occurring in Rule 57A has been used to widen and expand the scope, meaning and content of the expression 'inputs' so as t....