ORDER
J.N. Srinivasa Murthy, Member (J)
1. This is the Department’s appeal against the impugned order captioned above praying for quashing the same in respect of defective radiators and to restore the Order-in -Original.
2. The facts of the case are that the appellants filed two Modvat declarations dated 27-1-1992 and 19-2-1992 under Rule 57G for availing of credit of duty and Rule 57A on Thinner/Paints (Chapter sub-heading No. 3208.00) and Radiators (Chapter sub-heading No. 8708.00) as inputs to be used in or in relation to the manufacture of final product “Radiator” falling under Chapter sub-heading No. 8708.00. The Assistant Collector of Central Excise by his order dated 3-7-1992, disallowed the credit, saying that Paint and Varnish, as such Thinner/Paint do not constitute as inputs, as the manufacture of Radiator is complete without it. Defective radiators are not the necessary inputs, in the manufacture of final product “Radiators”. In the appeal by the Respondents Collector (Appeals) has allowed the same by his order dated 18-1-1993, on the ground that paint is required as protective coating against rust and corrosion and thus paint is an input, and the defective radiators are apparently used to make fresh radiator, which are the input in terms of point No. 6 of the minutes of the meeting on Modvat, held in June, 1989. Hence this appeal.
3. Perused the order of the Assistant Commissioner and of Collector (Appeals) and heard both sides. The ld. Counsel for the appellant has relied on 1993 (68) E.L.T. 146 (Tribunal) in the case of Alcobex Metals Ltd. v. Collector of Central Excise and 1997 (93) E.L.T. 283 (Tribunal) in the case of Udasee Stamping Pvt. Ltd. v. Collector of Central Excise, Jaipur wherein it is held that, the defective goods received from customer by manufacturer under Rule 57F(1)(ii) of the Central Excise Rules, 1944 treatable as scrap for purposes of Modvat credit.
4. On the perusal of the decision in 1997 (93) E.L.T. 283 (Tribunal) it is seen that 1993 (68) E.L.T. 146 (Tribunal) in the case of Alcobex Metals Ltd. v. Collector of Central Excise is followed in coming to the above finding in para 5 of the Judgment. It is held that the defective goods cleared by customers under Rule 57F(1)(ii) received by the appellant under cover of gate pass on payment of duty and remelted and used as inputs in the manufacture of final products -Modvat credit was available on such inputs – the defective goods being used as inputs – and the defective goods cannot be considered as final product. In view of this position the impugned order has to be upheld. The finding of the Assistant Collector regarding the defective radiators is too vague. So the appeal cannot be allowed and it is rejected.