ORDER
Shri S. L. Peeran
1. This is a Revenue appeal against Order-in-Appeal No.6/99 (M-I) (D) dated 26.5.99 challenging the correctness of grant of Modvat credit on the following items:
Wind Screen Wiper Kit &
Wiper Motor
on the ground that they are not essential accessories to the chasis manufactured by the assessee. The findings recorded by him in para 6 is reproduced below:-
6. I find force in the pleadings of the respondents. It is common knowledge that without wiper motor, the vehicle cannot run during the rainy days. It may be that the impugned items are supplied in loose condition at the time the chassis leave the factory. However, since these are essential items and the value arrived is also included in the final product it has to be taken that the impugned items are used in or in relation to the manufacture of the final product viz., chassis. In the impugned order, the A.C. has extended the credit considering that an items as accessory supplied along with final product would also get the benefit of the amending notification No.28/95(NT) dated 29-6-95. Looked at any way, the fact that the impugned items are essential for the running of the motor vehicle is not denied. So, the fact that they are supplied in loose condition and not fitted would not take away their essentiality and so long as the value of such items are included in the assessable value of the final product, which is not denied, the credit under rule 57 A has to be extended. I therefore uphold the A.C.’s order and reject the departmental appeal.
2. The above findings are challenged on the ground that the assessee is a manufacturer of Motor vehicle chasis as per the request of the customers. Just because the value of impugned items is added to the value of Motor vehicle chasis, it cannot be said that the impugned items are in or in relation to the manufacture of the chasis. Hence, they seek for restoring the Order-in-Original.
3. I have heard both sides in the matter and after deep consideration, I am agreeable with the findings recorded by the Commissioner (Appeals). The Commissioner(Appeals) in the above noted order has clearly noted that the items are essential for running a motor vehicle and without it, a motor vehicle cannot function both from practical point of view and also for safety purpose. It is also an essential rule in the Motor vehicle Act for having these items fixed to the chasis and on the vehicle and non-fixing of it would be a serious offence punishable with penalty. Judicial notice of commonly understood facts can be taken by the Tribunal. Commissioner has clearly noted that the value is added to the final product and it is an essential item and being an essential item for running of the motor vehicle, the benefit of credit cannot be denied. This reasoning adopted by the Commissioner is supported by Larger Bench decision of the Tribunal rendered in the case of Jawahar Mills Vs. CCE [1999 (108) ELT 747]. This was further clarified by another Larger Bench decision in the case of Surya Roshini Vs. CCE [2001 (128) ELT 293]. Earlier Larger Bench decision of Union Carbide Vs. CCE [1996 (86) ELT 513] is also relevant for interpreting the terms user “in or in relation to” manufacture of final product. In another Larger Bench judgment, i.e. in the case of Bajaj Ltd. Vs. CCE Pune [1996 (88) ELT 355], the question of grant of credit on “Jack Assemblies” and other tools (tool kits) supplied along with the motor vehicle camp up for consideration. The Larger Bench upheld the assessee’s contention that “Jack Assemblies” and other tools are “tools” and they are required to be considered as inputs and Modvat credit is required to be extended. The Tribunal has looked into various Supreme Court and High Court rulings to arrive at these judgments. In view of the settled position, there is no merit in this appeal and hence the appeal is rejected.
4. (Pronounced & dictated in open court)