TMI Blog2009 (7) TMI 727X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to credit. Grinding wheels to be considered as parts of grinding machine used by respondent and as inputs entitled to credit. Question answer in favour of respondent assessee. - 11 of 2000 - - - Dated:- 16-7-2009 - A.L. Dave and K.A. Puj, JJ. REPRESENTED BY: Ms. Manisha Lavkumar, for the Appellant. None, for the Respondent. [Judgment per: K.A. Puj, J. (Oral)]. - At the instance of the Commissioner of Central Excise and Customs, Surat the Customs, Excise And Gold (Control) Appellate Tribunal, Bombay has referred to the following question of law for the opinion of this Court under Section 35-G of the Central Excise Act, 1944; "Whether the Hon'ble Tribunal is correct in holding that Grinding Wheels i.e. the parts of gri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Rs.29,370.78 basic duty plus Rs.1,466.56 special duty total Rs.30,837.34 during the period from 20.10.1989 to 31.3.1990. The department was of the view that credit of inputs is admissible only when such inputs are used within the factory of production in or in relation to the manufacture of final products. Since the Grinding Wheels which were fixed on the machinery do not form part of inputs as they were not used in or in relation to the manufacture of final products, the condition laid down under Rule 57A was not fulfilled. The superintendent of Central Excise has, therefore, issued demand-cum-notice to show cause dated 16.4.1990 as to why the credit of Rs.29,370.78 plus Rs.1,466.56 special duty total Rs.30,837.34, wrongly taken and util ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ector 1996 (SC) E.L.T. 613 (Tribunal) and also the decision of larger Bench in the case of Collector of Central Excise, Bolpur Vs. Durgapur Cement Works, 1997 (90) E.L.T. 197 (Tribunal). The Tribunal held that Grinding Wheels are definitely parts of the grinding machines used by the appellants and they have to be considered as inputs under Rule 57A of the Rules. 6. The Central Excise Department thereafter filed reference application before the Tribunal under Section 35G of the Central Excise Act and the Tribunal vide its order dated 24.12.1999 referred the above question of law for opinion of this Court. 7. Ms.Manisha Lavkumar, learned Central Government Counsel appearing for the Excise Department has submitted that the Grinding Whee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal is required to be reversed and the question referred to this Court should be answered in favour of the department and against the assessee. 8. Despite service of notice nobody appears on behalf of the respondent assessee. 9. The question referred to this Court is required to be considered and answered in light of the provisions contained in Rule-57A of the Central Excise Rules, 1944. This rule deals with the applicability of the modvat scheme. According to this rule credit of Central Excise Duty is available in respect of Central Excise Duty, Special Excise Duty and countervailing duty paid on inputs, used in the production of final products mentioned in 37 Chapters of the Central Excise Tariff Act. The real question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as parts in machine or machinery in the manufacture of paper and paper products are eligible inputs and are not excluded by virtue of exclusion clause (i) of Explanation to Rule-57A of Central Excise Rules, 1944. The Tribunal further held that copper wire used in welding process in the manufacture of metal containers and ending up as waste because of small particles of tin deposits thereon, is an eligible input. The Tribunal, therefore, took the view that copper wire is used in relation to manufacture of metal container, since without use of the copper wire manufacturing process cannot be conducted. The copper wire was, therefore, held as input as contemplated in Rule-57A of the Central Excise Rules, 1944. 11. In the case of Andhra Pra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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