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TMI Blog2010 (11) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of V.P. sugar and molasses, availed of CENVAT credit on welding electrodes, falling under sub-heading 8311.00 of the Central Excise Tariff Act, 1985 (for short "the Tariff Act"), under Rule 2 of the 2002 Rules. The Range Superintendent, vide his letter dated 21st November, 2002 asked the assessee to furnish details of use of welding electrodes in their factory. The assessee replied to the said letter on 28th November, 2002 stating that the said goods are used in the maintenance of their plants and machinery. 3. Thereafter, three show cause notices dated 4th October 2002, 3rd April 2003 and 7th July 2003 were issued to the assessee for the periods February 2002, March 2002 to October 2002 and November 2002 to April 2003, respectively proposing to recover the wrongly availed credit amount for those periods amounting to a total of Rs. 1,33,871/- together with interest and penalty. 4. The Assistant Commissioner, Central Excise, Meerut, vide Order-in-Original dated 20th August 2004 confirmed the demand of Rs. 1,33,871/-. The Assistant Commissioner also imposed a penalty of equal amount under Rule 13 of the 2002 Rules and charged interest under Section 11AB of the Act. 5. Being ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not respond to the letters of the Superintendent sent on 5.04.2002, requiring them to reverse the credit as it was not admissible. The appellant cannot rely upon a self- created uncertainty when the provisions of law were (sic) clear and by the decision of the Tribunal rendered as far as back in 1996 in CCE, Belgaum Vs. Panyam Cements & Mineral Inds ., it was held that welding electrodes used for maintenance of machines were (sic) not eligible for Modvat credit. The authorities below have made the impugned orders imposing penalty and directing interest to be recovered for valid reasons, warranting no interference by this Court. The appeal, is, therefore, dismissed." 7. Hence, the present civil appeals. 8. Mr. Prakash Kumar Singh, learned counsel appearing on behalf of the appellants while assailing the impugned orders, strenuously urged that in light of the decisions of this Court in MarutiSuzuki Limited Vs. Commissioner of Central Excise, Delhi-III (2009) 9 SCC 193 and Vikram Cement Vs. Commissioner of Central Excise, Indore (2006) 2 SCC 351, welding electrodes would come within the ambit of "inputs" as defined in Rule 2(g) of the 2002 Rules, in as much as they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether contained in the final product or not. The crucial requirement, therefore, is that all goods "used in or in relation to the manufacture" of final products qualify as "input". This presupposes that the element of "manufacture" must be present............................................................ ........................................................................... ........ 34. In the past, there was a controversy as to what is the meaning of the word "input", conceptually. It was argued by the Department in a number of cases that if the identity of the input is not contained in the final product then such an item would not qualify as input. In order to get over this controversy in the above definition of "input", the legislature has clarified that even if an item is not contained in the final product still it would be classifiable as an "input" under the above definition. In other words, it has been clarified by the definition of "input" that the following considerations will not be relevant: (a) use of input in the manufacturing process be it direct or indirect; (b) even if the input is not contained in the final product, it would still be covered by the defi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... puts mentioned in the inclusive part are "used in or in relation to the manufacture of final product". It is the functional utility of the said item which would constitute the relevant consideration. Unless and until the said input is used in or in relation to the manufacture of final product within the factory of production, the said item would not become an eligible input. The said expression "used in or in relation to the manufacture" has many shades and would cover various situations based on the purpose for which the input is used. However, the specified input would become eligible for credit only when used in or in relation to the manufacture of final product............... ....................... ................................................... ............................................................................. .......................... 40. As stated, the definition is in three parts, namely, specific part, inclusive part and place of use. All the three parts are required to be satisfied before an input becomes an eligible input." 12. The effect of the afore-mentioned decision is that in order to fall within the ambit of the term "inputs" within the mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of extension, and not with restriction. The word `include' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used, these words or phrases must be construed as comprehending, not only such things as they signify according to their natural import but also those things which the interpretation clause declares that they shall include." 15. Therefore, it is trite that generally the word "include" should be given a wide interpretation as by employing the said word, the legislature intends to bring in, by legal fiction, something within the accepted connotation of the substantive part. (Also see: C.I.T., Andhra Pradesh Vs. M/s. Taj Mahal Hotel, Secunderabad (1971) 3 SCC 550; Indian Drugs & Pharmaceuticals Ltd. & Ors . Vs. Employees' State Insurance Corporation & Ors. (1997) 9 SCC 71; T.N. Kalyana Mandapam Assn. Vs. Union of India & Ors .( 2004) 5 SCC 632). It is also well settled that in order to determine whether the word "includes" has that enlarging effect, regard must be had to the context in which the said word appears. (See: The South Gujarat Roofing Tiles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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