TMI Blog1992 (8) TMI 198X X X X Extracts X X X X X X X X Extracts X X X X ..... lene, Thermo Couple Tips and Refractory Cement are not eligible for the benefit of MODVAT Credit. The Revenue in the appeal is aggrieved against the benefit of MODVAT Credit allowed in respect of Graphite Nipples. 2. The learned Counsel for the appellant (Shimoga Steels) pleaded that in a number of decisions it has been held that MODVAT Credit is available in respect of Acetylene Gas. In this context he cited the case law reported in 1990 (48) E.L.T. 552 in the case of Mukund Iron and Steel Works Ltd. In respect of Thermo Couple Tips he pleaded that the Central Board of Excise and Customs have clarified on 17-7-1987 [1988 (33) E.L.T. (T.21]) that Pyrometer Tips is eligible for the benefit of MODVAT Credit. A later clarification has been i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tems. In regard to Graphite Nipples for which the lower authority has allowed MODVAT Credit, he has pleaded that its use is in the nature of an equipment or apparatus and, therefore, MODVAT Credit should not be allowed. The learned Counsel for the Respondent (Shimoga Steel) in this regard pleaded that Graphite Nipples get consumed along with electrodes and, therefore, MODVAT Credit should be allowed in respect of this item. 4. We observe that so far as Acetylene Gas is concerned this Bench of the Tribunal as also other Benches held that benefit of MODVAT Credit is available in respect of Acetylene Gas being a consumable item used in the manufacturing process and following the ratio of our earlier decisions and that of the West Regional Be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consideration the use of the same that it is a lining material for the furnace, we hold in the light of our earlier decision, reported in 1988 (38) E.L.T. 485 and also West Regional Bench decision reported in 1990 (48) E.L.T. 552 that the same being used as part of the furnace, it should be taken to have been used in relation to the equipment for the manufacture of steel and for that reason benefit of MODVAT Credit cannot be allowed. Likewise, sodium silicate and ramming mass are also not eligible for MODVAT Credit. We observe that in the case of the Andhra Pradesh Paper Mills Ltd. v. CCE, Guntur, decided by this Bench on 4-4-1990 in Appeal Nos. E/267 268/89 - 1990 (50) E.L.T. 252 (Tribunal) the Bench has taken note of the observations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ftening of water is concerned, the same is a process which is for the manufacture of paper and softening of water is a requirement for the manufacture of paper. He has thus conceded that soda ash used in this process would also be eligible for the benefit of MODVAT Credit. In regard to the other chemicals the position is, however, different. Hydrochloric acid is used for cleaning of the wire mesh as and when the same is found to have been clogged. The question is whether this cleaning operation can be considered to be a process of manufacture. Admittedly it is a process of maintenance of the wire mesh to keep it in the desired condition. Therefore, it cannot be said to have been used in the process of manufacture of paper. However, a point ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty paid in respect of the goods which are used in or in relation to the manufacture of the finished product. The machineries, equipments and apparatus by themselves have been precluded from the benefit of the MODVAT Credit. Cascading effect of the duty paid on the machinery used in or in relation to the manufacture of the finished goods is not to be mitigated and as a corollary thereto the parts which are used in these machineries to make them functional also are not entitled to the benefit of the MODVAT Scheme. These parts which are used as replacement from time to time have to be held to have been used in relation to the machines themselves and not in relation to the manufacture of the goods. In the scheme of MODVAT if the parts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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