TMI Blog1997 (1) TMI 195X X X X Extracts X X X X X X X X Extracts X X X X ..... uts in or in relation to the manufacture of acrylic fibre and synthetic filament yarn which are the final products of the appellants. 2. I have heard Shri R. Sudhinder, learned Counsel and Shri Y.R. Kilania, learned DR and my findings are recorded hereunder. 3. Item No. 1 Heat Transfer Oil : Reason for inadmissibility : indicated in the show cause notice and confirmed by the lower authorities - Heating Media used for heating caprolactum : not used in or in relation to the manufacture of the final product. My finding : Heat Transfer oil (Diphyl oil) is used as a media for transferring heat to Caprolactum Monomer which is a principal raw material for the manufacture of synthetic filament yarn. Caprolactum for further process of polyme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... These chemicals are used for keeping the jet spinnerettes absolutely clean and to remove clogging. If the holes in the spinnerettes are not properly cleaned or if the holes become out of shape while cleaning, yarn of proper denier will not be obtained. The cleaning process is to further the processing and obtaining of filament yarn of proper denier. Applying the ratio of the Tribunal s order in the case of Collector of Central Excise, Bangalore v. Asian Cables Ltd. [1986 (81) E.L.T. 509] extending the benefit of Modvat credit to Trichloroethylene used for cleaning lids of cannisters for keeping blades rust free, I hold that the above mentioned chemicals are eligible inputs for Modvat credit. 5. Item No. 3 Silicon Spray : (Sl. No. 6 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... polymer and to readjust the process parameters, if any, deficiency is found in the polymer/yarn which may require rectification. The appellants have made a categoric averment that the above two chemicals are not used for analysing the various properties of final products and this stand is not rebutted by the department. Since these chemicals are used in relation to the manufacture of the final product and do not fall in the excluded category, the benefit of Modvat credit is to be extended to them. 7. Item No. 5 Packaging Material : (Cartons, Polythene bags, P.P. strap, Paper tubes, P.P. Wonder tape, 3" Sodium Silicate, HDPE fabric and GI wire) (Sl. No. 9 and 12 of the show cause notice) Reasons for inadmissibility : Rate of duty is spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessees have obtained beneficial treatment of excluding the value of packaging material from the assessable value under Section 4(4)(d)(i), cannot commit a volte-face when confronted with the provisions of Rule 57A by pleading that the bottles in which their product (Mango juice) was being cleared was not a container but a constituent of the product itself (sic.) from the contents thereof. The above judgments lends support to the argument of the appellants counsel that the packaging material excluded from the scope of inputs is of that nature which would be entitled to deduction from assessable value, as otherwise such packaging material would get the total benefit of being entitled to deduction in terms of Section 4(4)(d)(i) as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olactum is charged once again into the manufacturing process as a raw material along with duty paid virgin caprolactum. Rule 57D of the Central Excise Rules specifically provides that the credit of specific duty allowed in respect of any inputs shall not be denied or varied on the ground that part of the inputs is contained in any waste, refuse or by-product arising during the manufacture of the final product, whether or not such waste etc. is chargeable to nil rate of duty. Further Rule 57D(2) specifically provides that the credit on inputs shall not be denied on the ground that, any intermediate product has come into existence during the course of manufacture of the final product, provided that such intermediate products are used within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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