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2016 (12) TMI 80 - CESTAT MUMBAIMODVAT credit - Ceramic Balls - Ethyl Alcohol - manufacture of Mono Ethylene Glycol (MEG), Di Ethylene Glycol (DEG) & Tri Ethylene Glycol (TEG) falling under sub-heading 2905.90 of the Central Excise Tariff Act, 1985 - whether the denial of MODVAT credit on the ground that it is not directly used in the manufacture of final product, justified? - Held that: - Ceramic Balls are used for de-sulphurication of feed stock Ethylene viz: to purify the basic raw material. In our view, this process is vital process for further manufacturing of final products. Ethylene without purification cannot be used in the manufacture of final product. Therefore the use of Ceramic Balls for processing of raw material for the manufacture of final products. The processing of manufacture start from of the raw material stage up to the manufacture of final product. It is used for conversion of non-purified Ethylene to purified form. Therefore the Ceramic Balls are used in the manufacturing process - The very same issue has been decided by this Tribunal in favor of the appellant as per the Tribunal decision in the case of Reliance Industries Ltd. [2000 (1) TMI 85 - CEGAT, MUMBAI], where the credit was allowed. As regard Ethyl Alcohol, we find that the same is pumped to MEG plant by vertical pumps at minus 130 degrees and its leakage to atmosphere is extremely hazardous. The Ethyl Alcohol is circulated in the pump seals which act as barrier for preventing leaks of Ethylene. In our considered view this process is part of the manufacturing of final products. Both the inputs i.e. Ceramic Balls and Ethyl Alcohol are used in the manufacturing of final product of the appellant. Therefore the appellant is entitled for the MODVAT credit on the said items - appeal allowed - decided in favor of appellant-assessee.
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