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TMI Blog1995 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... h surfaces and scratch free blades. 2. Shri Ramasubramanian, the learned Consultant for the respondent contended that Freon Solvent is anti-rust or anti-corrosion preparation used in the manufacture of blades. Stropping paste is used for polishing and to sharpen the blade. Regarding Trichloroethylene, it is applied periodically to help the blade 100 per cent free from dust or impurity and if the same is not done the blade will get rusted impairing its marketability due to lack of quality. Teflon Coated Glass Cloth is used to prevent distortion to the blades and impart a scratch free surface finish to the blades during the process of manufacture. 3. We have gone through the records and heard the parties and gone into the functional aspects of the various items involved. We agree that Freon Solvent, Stropping paste and Trichloroethylene are inputs having regard to the functional use in relation to the end product, while we do not agree with the learned Consultant that Teflon Coated Glass Cloth having regard to its function cannot be considered to be an input. Reliance was placed by the respondent on the ratio of the ruling of the Supreme Court in the case of Collector of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been briefly set out in the authorisation issued by him under sub-section 2 of Section 35B of the Central Excises & Salt Act, 1944. The matter was argued before us in respect of the above mentioned three items. In the appeal memorandum the Assistant Collector who was authorised to file appeal has also prayed for setting aside the order of the lower appellate authority allowing Modvat credit in respect of Freon Solvent/Freon TF solvent also alongwith the other items. It has to be held therefore that the Assistant Collector has unauthorisedly included the plea in regard to Freon Solvent/Freon TF solvent in his appeal and the matter is required to be decided only in the context of the other three items. I therefore, hold that we are not called upon to pronounce the admissibility or otherwise of Modvat credit in respect of Freon solvent/Freon TF solvent. 6. In regard to the other three items, taking into consideration the pleas of both the sides, my observation is as under : (1) Stropping paste. Its use and composition as given in the appeal memorandum is as under : Stropping Paste as clarified by the assessee is Aluminium Oxide Polishing compound, consisting of abrassive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into cannisters. The Cannister necessarily has to be free from any deposits or foreign particles which would mar the cleanliness of the blade's edge. For this purpose a cleaning fluid called Trichloroethylene is used. This is applied periodically so as to help the blade be 100% free from any dust or impurity. If these cleaning operations are not done by using Trichloroethylene, the blades will get rusted thereby impairing its marketability, due to loss of quality." During the course of the hearing we had specifically asked the representative of the Respondent as to whether Trichloroethylene is used in the cannisters when blades are received in the same and whether the blades are processed with Trichloroethylene in cannisters. It is seen that blades are put through the process of sputtering to give the same a chrome coating and they are heat cleaned in the furnace after they are loaded into the cannisters. Trichloroethylene is not used for cleaning of the blades. No heating is done in the presence of Trichloroethylene and the same is used for cleaning of cannisters periodically to remove any impurities sticking thereon. Use of Trichloroethylene is therefore in the nature of maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts is used more in the nature of sleeve over a chill block. Its use has to be taken to be with reference to make the machinery for the manufacture of blades functional. No doubt, the blades pass through these Teflon coated glass cloth sleeves. This operation has to be considered like passing of the material through the roller of a machinery when steel is manufactured. Use of Teflon coated glass cloth cannot to held to be to bring it within the purview of the term `input' as set out in Rule 57A of the Modvat Rules. I, therefore, allow the appeal of the Department partially in the above terms. Sd/- (V.P. Gulati) Dated : 24-11-1993 Member (T) POINTS OF DIFFERENCE Whether in the facts and circumstances of the case the view taken by the learned Member (J) that excepting Teflon coated glass cloth, all other items would be entitled to Modvat credit, or the view taken by Member (T) that admissibility of Modvat credit in respect of Freon Solvent/Freon TF solvent need not be gone into by the Tribunal and among the other three items viz Stropping paste, Trichloroethylene and Teflon Coated glass cloth, only Stropping paste would be admissible inputs for Modvat credit. Sd/- Sd/- (S. K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturing system, the Modvat credit has to be allowed, he referred to the following decisions : (1) M/s. Cans & Closures Ltd. v. Collector reported in 1991 (56) E.L.T. 474. (2) M/s. Sandhur Manganese & Iron Ore v. Collector, reported in 1985 (21) E.L.T. 901 (Tri.) - 1985 E.C.R. 862. (3) Collector v. M/s. Titaghur Paper Mills, reported in 1985 (21) E.L.T. 904 (Tri.) = 1985 E.C.R. 1152. 10. Sh. Indrajit, the learned DR, submitted that item Trichloroethylene was used for the maintenance of a machinery and not directly connected with the process of manufacture of final products and the item used for cleaning the machinery cannot be considered as an input and accordingly Modvat credit in respect of Trichloroethylene cannot be allowed as it was rightly observed by Member (T). 11. I have considered the submissions made by both the sides with reference to the difference of opinion. It is settled position that the item need not be physically present in the final product for entitlement of benefit of Modvat credit and it is sufficient if it is used/consumed directly or indirectly in the process of manufacture of the finished product. In the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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