S. Kalyanam, Member (J)

1. This appeal is directed against the order of the Collector of Central Excise (Appeals), Bangalore dated 30-9-1991 confirming the order of the Assistant Collector of Central Excise, Mysore dated 27-3-1991 and rejecting the appellant's claim for Modvat credit on printer ribbons used in relation to the manufacture of printers' for Computers.

2. Shri Khunger, the learned Consultant for the appellant contended that there is a heavy dependence on the ribbons for the proper functioning of the printer and therefore on the basis of heavy functional dependence of the printer, the ribbon which is absolutely indispensable and without it the printer cannot function should be construed to be an input eligible for Modvat credit. It was further urged that the printer has no computational ability on its own and without the ribbon the printer cannot print or print out any. The ribbons are specially designed for exclusive use in conjunction with the printers and have no other use. It was further urged that the value of "Ribbon" is included in the assessed value of the printer by the Department for the purpose of excise duty and therefore on the same reasoning the "Ribbon" should be construed to be an input in the printer. It was also submitted that duty suffered by the printer is allowed for Modvat credit if the same is sold along with a computer as an integral part and therefore, it does not stand to reason as to how "Ribbon" could be excluded for eligibility to Modvat credit as an input if it is used in the printer.

3. Shri Jayaseelan, the learned D.R. submitted that the printer is only a consumable and does not go into the manufacture of the end product, viz. the printer and therefore would not be eligible for Modvat credit. The D.R. adopted the reasoning of the learned Collector (Appeals) in the impugned order in other respects.

4. We have carefully considered the submissions made before us. When the Bench specifically put a question to the learned Consultant with reference to the applicability of the ratio of the ruling of the Supreme Court in the case of State of Uttar Pradesh and Anr. v. Kores (India) Ltd., reported in 1977, Sales Tax Cases Vol. 39, page 8, the Ld. Consultant sought to distinguish the same and submitted that the question for consideration before the Supreme Court was as to whether a ribbon for the typewriter was a component part or accessory for purpose of U.P. Sales Tax Act (Act 15 of 1948). It was urged that initially the High Court of Mysore, in the case of State of Mysore v. Kores India Ltd., reported in 1970, 26, S.T.C. 87, took a view that ribbon is not an essential part of typewriter to attract tax within the mischief of the 2nd Schedule to the Mysore Sales Tax Act, 1957, as typewriters were being sold in the market without the type ribbons. The Allahabad High Court in a ruling dated 20-2-1970 which was appealed against and considered in the abovesaid ruling of the Supreme Court took a similar view. It was urged that the decision of the Supreme Court, affirming the views of the Mysore High Court and Allahabad High Court was based on the issues arising under the provisions of the Sales Tax Acts and questions as to how the goods were actually marketed and their marketability were primarily taken note of for the view taken by the Supreme Court. We are unable to accede to the submissions of the Ld. Consultant, because in our view the issue whether the ribbon is an input in relation to the manufacture of the printer will be squarely governed and covered by the ratio of the ruling of the Supreme Court cited supra. Affirming the views of the two High Courts the Supreme Court in Kores India Ltd. case cited supra has clearly held that ribbon is only an accessory and not a component part of a typewriter. The Supreme Court has observed as under :-

"Regarding ribbon also to which the above-mentioned rule of construction equally applies, we have no manner of doubt that it is an accessory and not a par