TMI Blog1990 (4) TMI 143X X X X Extracts X X X X X X X X Extracts X X X X ..... as a slimecide to avoid formation of slime in the pipe line during process. (iii) Alfloc Powder: - This is used in the boiler water treatment but not for maintenance of boiler. (iv) Bleaching Powder: - Bleaching Powder is used as a germicide in the water treatment instead of chlorine when the same is not available. Chlorination process is stated to reduce the slime formation in the pipe line and is stated to be used in the course of manufacture of paper and not for maintenance of machinery. (v) Soda Ash: - Soda Ash alongwith lime is used in water treatment plant in softening of water being fed to the boiler to generate steam which is used at different stages of paper manufacture. (vi) Chipper Knives: - These are used for cutting the wood and bamboo to the desired sizes for further use in the manufacture of paper. (vii) Wire netting: - The same is used on the paper machines on which the paper gets finally formed and these have to be replaced periodically. (viii) Dandy covers: - These are used as part of the paper machine for proper formation of sheets for writing and printing paper. (ix) Woollen felts: Pulp is spread on the felts till its conversion into paper sheets ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mally encompass the entire process carried on by the dealer of converting raw materials into finished goods. Where any particular process is so integrally connected with the ultimate production of goods that but for that process, manufacture or processing of goods would be commercially inexpedient, goods required in that process would in our judgment, fall within the expression in the manufacture of goods . 6. The learned consultant pleaded that the collector has erred in holding that some of the chemicals used in the generation of steam which does not suffer any duty but which was used in various stages of manufacturing process in the factory could not be held to have been used in or in relation to the manufacture of paper. He pleaded under rule 57D intermediate products even if they are not chargeable to duty would not disentitle the inputs which had been used to produce the same from the benefit of MODVAT credit. He pleaded that these chemicals were also used in relation to the manufacture of the finished product. In regard to chipper knives, dandy covers, etc. he stated that no doubt the same were used on the machines but the fact remains that these items were not figuring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered in the light of the law laid by the Supreme Court as to the scope of the term in the manufacture of the goods as pointed out by the learned Consultant for the appellants in the case of J.K. Cotton Spinning Weaving Mills Co. Ltd. The Hon ble Supreme Court has held that the expression in the manufacture of goods should normally encompass the entire process carried on for converting raw materials into finished goods and that where any particular product is used in a process so integrally connected with the ultimate producation of goods that but for that process, manufacture or processing of goods would commercially be inexpedient the goods required in that process would fall within the expression in the manufacture of goods . 10. In the same context of MODVAT credit, the Hon ble Supreme Court in the case of CCE, Calcutta-II v. Easter Paper Industries Limited [1990 (26) ECR 10 (SC)] have held as under:- ...Anything required to make the goods marketable must form part of the manufacture and any material or any material used for the same would be component part for the end product... It is thus seen that the Hon ble Supreme Court has held that so long as it ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al which have ultimately to go into the manufacturing stream or in preparing of certain materials which directly or indirectly participate in the manufacturing process in a manner that these help in the process of manufacture to be carried a step further. The inputs used in these processes for manufacture of the products which are in turn used in the manufacturing stream of the finished product can be taken to have been used in the manufacture of the or in relation to the manufacture of finished product. Generation of steam which ultimately participates in the manufacturing processes is one such item. The other may be pre-treatment of the raw material which go into the manufacturing stream or the materials which may be used for making the end product ready for marketing. The use of the materials has to be such that they carry by their participation, in the manufacturing stream the process of manufacture a step further. The materials used for maintenance of the machines etc. are for cleaning the pipe lines as and when the situation warrants cannot be held in this context to have been used in relation to the manufacture of the end product but can be taken to have been used in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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