TMI Blog1988 (2) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... Sodium Chloride takes place. These Electrodes are purchased by the respondents and duty under Tariff Item 68 was charged thereon. The respondents were refused permission to avail of the credit of the duty paid on these electrodes by way of set off in terms of Notification No. 201/79 by the Asstt. Collector for the reason that since these electrodes were part of the Electrolytic cells and equipment used in the manufacture of the Caustic Soda, the benefit of the notification could not be allowed. The Collector (Appeals) however, took note of the fact that Notification No. 201 of 79-CE extended the benefit of the set off in respect of Item 68 goods used in the manufacture of any finished excisable goods subject to the other conditions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Soda. The Titanium Substrate Insoluble Anode though an item falling under T.I. 68 is not used in the manufacture of excisable goods, i.e. caustic soda but used as a part of electrolytic cells which is an ultimate part of caustic soda plant and does not form part of excisable goods i.e. the said goods, as such the same cannot be termed as input for the manufacture of excisable goods i.e. caustic soda. Thus it would be seen that Titanium Substrate Insoluble Anode, is not entitled to the benefit of set-off under Notification No. 201/ 79-C.E., dated 4-6-1979, not being input as held by Collector (Appeals) in the instant case. Further, it would be worth noting that Notification No. 201/79, dated 4-6-1979 is basically an exemption notification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of manufacture. The " learned advocate for the respondents Shri R.C. Desai pleaded that the electrodes were a consumable item and have a surface coating which gets worn out in 8-10 months. He pleaded that there are number of decisions of this Tribunal and the Supreme Court where it has been held that the words used in the manufacture of as used in the Notification 201/79 have a wider connotation and would cover even the goods which are not in the nature of raw materials but have nexus with the production of the goods. He pleaded that the Electrodes played a vital role in the manufacture of the goods. He cited the following Case Law in support of his pleas. (i) 1986 (25) E.L.T. 295, (ii) AIR 1965 S.C. 891, (iii) AIR 1965 S.C. 1310, (iv) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dered as an input as visualised in Notification 201/79 amended by the Notification No. 105/82 and duty paid on these cartons would be eligible for set-off. The ratio of these decisions show that for Item 68 goods utilised and consumed in this process of manufacture the benefit of Notification 201/79 would be available. The Tribunal in the case of Rockdril (India), Jodhpur v. Collector of Central Excise, Jaipur 1984 (17) E.L.T. have held that graphite moulds used in the manufacture of castings will be eligible for the benefit of set-off duty paid thereon when used in the manufacture of castings. 4. We also observe that the Hon ble Supreme Court and the Tribunal in its various decisions have interpreted the words used in the manufacture of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a part of the Electrolytic cell and over a period are consumed in the manufacturing process. No doubt that electrodes do not enter in the spectrum of manufacture as raw materials or participate in the production process as ingredients for the end product; but these participate in the reaction which leads to the production of the intended end product namely the Caustic Soda. In view of the nature of the goods and their nexus with the production process following, the ratio of the earlier decisions of the Tribunal and the observations of Supreme Court in the judgment cited, we hold that the Collector (Appeals) was right in allowing the respondents appeal for the benefit of Notification 201/79. We, therefore, reject the appeal of the Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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