TMI Blog1995 (4) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... al Excise Rules. The disputed inputs are liquid nitrogen, tri-ethylene glocol, (TEG), thermex, finor and KEM Watreat. The other issue is whether Modvat Credit of duty paid on inputs can be availed of and utilised in regard to the clearance of similar final products, if some of the final products are cleared for export under bond in terms of Rule 191BB of Central Excise Rules. 2. The appellants are engaged in the manufacture of Polyester Staple fibre and the aforesaid inputs were declared as inputs used in or in relation to the manufacture of the final product. However, the Dept. objected to their eligibility on the ground that they are not utilised in or in relation to the manufacture of the final product and hence they are not eligible t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of an equipment, it cannot be allowed Modvat benefit. In the case of finor, he pleads that it is only made for increasing the efficiency of the boiler and goes along with the equipment. Likewise, in the case of KEM Watreat, it is a chemical used for treating water for cooling purposes. Hence it does not go into the manufacturing process. 5. As regards the denial of Modvat credit in respect of inputs used in the final product cleared for export under Rule 191BB, he pleads that a reference Application has been moved against the decision of this Bench in the case of Reliance Industries. He would plead that export under bond referred to in Rule 57F(3) can only mean exports directly from the factory to a place outside India in terms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in regard to this input has to be reversed. 6.3 As regards Thermex, it is a material required for maintaining temperature at a particular level, so as to enable the chemical reaction to take place. It is necessary for achieving high degree of heat to enable reaction. In the circumstances, it is an input eligible for Modvat credit and it is not an equipment or machinery or appliance. 6.4 As regards Finor, it is an item used for achieving medium temperature in stream and is needed for heat setting of polyester tow during the drawing process. It is an input used in relation to the manufacturing process, without which manufacturing process will be affected. Hence we allow Modvat credit in respect of this item. 6.5 As regards KEM Wat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard to clearance of similar final products. Rule 57C seeks to deny Modvat credit, if the final products are either wholly exempted or are chargeable to Nil rate of duty. We have held that in the case of goods cleared under a Notification issued under Rule 191BB for export purposes, such goods cannot be equated with goods exempted under an exemption Notification issued under Rule 8(1) of the C.E. Rules or Section 5A of C. Ex. Act nor they can be construed as goods chargeable to Nil rate of duty. For arriving at this conclusion, we have taken note of the Board s own instructions issued in the context of identical provisions of Rule 56A of the C.E. Rules, after consulting the Ministry of Law. The argument of Shri Nair that irrespective of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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