M/S. FLEX ENGINEERING LTD. vs. COMMNR. OF CENTRAL EXCISE, U.P

C.A. No.-007152-007152 - 2004Supreme Court13 January 201225 pages
For Petitioner: RAJESH KUMARFor Respondent: B. KRISHNA PRASAD
AI SummaryAllowed

What did the Supreme Court hold?

The Supreme Court held that the testing process for customized machines is an integral part of the manufacturing process and the materials used for testing are considered inputs eligible for Modvat credit.

What were the facts?

The assessee, engaged in manufacturing 'made to order' packaging machines, used plastic films for testing and tuning these machines as per customer specifications. Modvat credit was claimed for these films.

What were the issues?

Whether materials used for testing customized machines are considered 'inputs' for Modvat credit purposes, and if the testing process is part of the manufacture.

Which sections of the Income-tax Act were involved?

Rule 57A of the Central Excise Rules, 1944

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Cases cited in this judgment(13)Show list

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Cause title — parties, addresses and appearances
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 7152 OF 2004 M/S FLEX ENGINEERING LIMITED — APPELLANT VERSUS COMMISSIONER OF CENTRAL EXCISE, U.P. — RESPONDENT WITH CIVIL APPEAL NO.429 OF 2012 (Arising out of S.L.P. (C) No. 875 of 2008), CIVIL APPEAL NO.430 OF 2012 (Arising out of S.L.P. (C) No. 10759 of 2010) AND CIVIL APPEAL NO.431 OF 2012 (Arising out of S.L.P. (C) No. 6501 of 2011)

J U D G M E N T D.K. JAIN, J.: 1

1.

Leave granted in S.L.P. (C) Nos. 875 of 2008, 10759 of 2010 and 6501 of 2011. 2. This batch of appeals, by grant of leave, arises out of judgments dated 26th August, 2002 in C.E.R. No. 11 of 2001, 11th April, 2007 in C.E.A. No. 10 of 2004, 8th September, 2009 in C.E.A. No. 6 of 2003 and 25th October, 2010 in C.E.R. No. 51 of 2002 passed by the High Court of Judicature at Allahabad. By the impugned judgments, rendered in the reference applications filed by the assessee, under Section 35H of the Central Excise Act, 1944 (for short “the Act”), the questions referred by the Customs, Excise and Gold (Control) Appellate Tribunal, as it then

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