SUNDARAM CLAYTON LIMITED Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) THIS appeal is directed against the order dated 29-2-1988 passed by the Collector of Central Excise (Appeals), Madras, by which he had allowed an application filed by the Department before him, under Section 35E(4) of the Central Excises and Salt Act, 1944 against the order of the Assistant Collector of Central Excise, Hosur Division, holding that the Assistant Collector, Hosur, was wrong in allowing MODVAT credit to the appellants on the Tool kits supplied by them along with the Mopeds manufactured and cleared by the appellants.

(2.) The appellants are manufacturers of Two Wheelers (Mopeds) at Hosur. They were availing of MOD VAT credit under Rule 57-A of the Central Excise Rules, 1944 from 1-3-1986 onwards. They filed a declaration for the purpose as required under Rule 57G for Tool kits as one of the inputs for their final product, viz. Mopeds. A Show Cause Notice was issued to them on 17-2-1987 as to why the Tool kits should not be treated as not an input and the MODVAT credit denied to them. The Assistant Collector after hearing the appellants passed an order on 16-7-1987 confirming that the Tool kits which were supplied along with the Moped is an input covered by Rule 57-A and eligible for MODVAT credit. The Collector of Central Excise, Coimbatore, did not agree with the decision of the Assistant Collector and, therefore, gave a direction under Section 35-E(2) to the Assistant Collector, Hosur to seek a review of the Assistant Collector's order before the Collector (Appeals) and the Assistant Collector filed an application accordingly under Section 35-E(4) of the Central Excises & Salt Act, 1944, before the Collector (Appeals), who found that the Assistant Collector was wrong in holding that the Tool kits are inputs for the purpose of MODVAT credit under Rule 57-A for the manufacture of Mopeds.

(3.) HEARD Shri K.K. Bhatia, the learned S.D.R.