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TMI Blog1997 (1) TMI 260X X X X Extracts X X X X X X X X Extracts X X X X ..... chemicals. The department alleged that Modvat credit on these items was not admissible inasmuch as these items were meant for maintaining the arc furnace and therefore fell in the excluded category. Therefore 23 show cause notices were issued to the appellants. The appellants filed a writ petition before the Hon'ble High Court of Madhya Pradesh. While disposing of the writ petition the Hon'ble High Court directed that the matter be kept for decision of the department in conformity with the decision in the case reported in 1994 (71) E.L.T. 776 (CCE, Chandigarh v. A.B. Tools Ltd.) and 1994 (74) E.L.T. 123 (Kesari Steels v. CCE, Indore). Personal hearings were granted to the appellants however they did not avail of. The Commissioner therefore proceeded to decide the case in terms of Hon'ble High Court's orders and held that Modvat credit shall be admissible on ramming mass and no Modvat credit shall be admissible on the other items. 3. Shri A. Upadhyay, learned Advocate appearing for the appellants submits that explanation under Rule 57A lists the items under clause (c) on which no Modvat credit will be admissible. It was argued by the learned Counsel that expression `in relatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After hearing both the sides it was decided to hear dispose of the appeal with the consent of both sides. 5. Heard the submissions of both sides. We find that the items on which Modvat credit has been denied are Mortars, Refining Flux, Bottom Pouring Sets, Refractory Bricks, Mozolex, Refractory castables and Miscellaneous Chemicals. For finding the use of these products in the process of manufacture, if any, let us examine the function of each of these items which is as under :- (i) Mortars :- These are refractory materials used as layers in the lining of arc furnace or for joining fire bricks and requires frequent replacement. These are being used for maintenance of arc furnace. (ii) Refining Flux :- These are actually refractory materials used in the lining and maintenance of arc furnace. (iii) Bottom Pouring Sets :- These are refractory items or fire bricks and are used under bottom pouring system to connect different moulds during pouring of molten metal and thus as appliances. (iv) Refractory Bricks :- These are refractory materials which form part of the electric arc furnace. (v) Nozolex :- These are refractory materials which form part a of electric furnace. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x, Refractory Castables and Miscellaneous Chemicals. 7. However we find that most of the cases so far decided by the Tribunal came for consideration before the Larger Bench of this Tribunal in the case of Union Carbide reported in 1996 (86) E.L.T. 613 (Tribunal) = 1996 (15) RLT 144 wherein the Tribunal held that : "The one common thread which runs through all these definitions is the self-contained or complete nature of the goods. Almost every one of the expressions take in self-contained, complete units or group or assemblage of parts. None of the expressions take in mere part unless it be that the part by itself is a self-contained or complete machine, apparatus, appliance, machinery, or tool. There is no controversy that machine used for manufacture of specified final products would be eligible input for the purpose of Rule 57A of the Rules, but for the exclusion clause (i). That being so, the absence of specific reference to spare parts in the exclusion clause (i) is of considerable significance. The Rule-making authority, which was aware that specified machines and such other goods are eligible inputs if they are used in the manufacture of specified final products, and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pparatus, tools or appliances..." These expressions indicate a self-contained unit, complete unit or whole unit but not any part thereof, unless of course, such part is also a complete unit in itself. The intention to exclude parts also along with machines, machinery and such other goods cannot be gathered from the language used, nor is it spelled out by necessary implication. "There is a controversy as to whether the Rules of interpretation and Section notes and Chapter notes meant for classification of excisable goods for levy of duty could be relied on for interpreting the terms specified Rule 57A for excluding them from the scope of the term "inputs". The same doubt may arise in regard to use of these Rules for interpreting the terms specified in Notifications. The West Regional Bench was inclinded to answer the question in the negative contrary to the reliance placed upon such Rules by the East Regional Bench. In indicating this view, the West Regional bench chose to disregard the decision of the High Court of Calcutta which is one of the few decisions of High Courts available on this aspect. The High Court of Calcutta in Singh Alloy and Steel Ltd. v. Assistant Collector of C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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