TMI Blog2004 (12) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case was correct in not having followed the decision of the Larger Bench of the Tribunal in the case of A.B. Tools [1994 (71) E.L.T. 776] extending Modvat credit on an analogous input viz. ramming mass used for lining of furnace which is similar to the use of the input in the question viz. refractory bricks? (iv) Whether the majority view in the present case was correct in holding that fire bricks which are construction materials for furnaces are used only as raw materials in the manufacture and subsequent maintenance of the furnaces as such not treatable as used "in or in relation to the manufacture" of the appellants final product, steel? (v) Whether the Tribunal has erred in interpreting the observation of the Hon'ble Supreme Court in the case of C.C.E. v. Ballarpur Industries (supra) about the utilisation of the material in the manufacturing process as distinct from the manufacturing apparatus to mean that the use of fire bricks by the applicants constitutes their use as manufacturing apparatus and not use in the manufacturing process?" 2.The assessee is engaged in the manufacture of iron and steel products classified under Chapter 72 of the Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r res integra. In Collector of Central Excise, New Delhi v. M/s. Ballarpur Industries Limited, 1989 (43) E.L.T. 804 (S.C.) = AIR 1990 SC 196, the Supreme Court considered the question whether Sodium Sulphate could be said to have been used as "Raw Material" in manufacture of paper and paperboard and hold as under :- "It is improper to say that for a input or ingredient to qualify itself is "Raw material" it must necessarily and in all cases go into, and be found in the end-product. The ingredients used in the chemical technology of manufacture of any end-product might compromise amongst others, of those which may retain their dominant individual identity and character throughout the process and also in the end-product; those which as a result of interaction with other chemicals or ingredients, might themselves undergo chemical or qualitative changes and in such altered from find themselves in the end-product; those which, like catalytic agents, while influencing and accelerating the chemical reactions, however, may themselves remain uninfluenced and unaltered and remain independent of and outside the end-products and those which might be burnt-up or consumed in the chemical react ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the same in the following words : "There can be no doubt that the raw naphtha that was fed by SAIL into its plant was for the purpose and with the intention of manufacturing fertiliser and that it was only because of supervening circumstances, namely, the low, uncertain and fluctuating availability of power, that the reformed gas produced during the interim stage of manufacture had to be vented out. The benefit of the exemption notification is, therefore, available to SAIL in regard to the raw naphtha that it utilised in its plant for the manufacture of fertiliser but which, for reasons over which it had no control, did not, in fact, result in the manufacture of fertiliser but had, at the interim stage of reformed gas, to be vented out." 7.In Jaypee Rewa Cement v. Commissioner of Central Excise, M.P. - 2001 (133) E.L.T. 3 (S.C) = (2001) 8 SCC 586, the Supreme Court considered the question whether the explosive used to extract limestones from mines could be treated as inputs for the manufacture of cement so as to entitle the assessee to claim Modvat credit under Rule 57A of the Rules and held as under :- "Admittedly, explosives fall under Chapter 36 of the Schedule to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e intermediate product, namely, limestone which, in turn, was used for the manufacture of cement." 8.In Central Excise Commissioner, Bangalore v. M/s. Escorts Mahle Limited - 2003 (154) E.L.T. 321 (S.C.) = AIR 2003 SC 2234, the Supreme Court considered the question whether or not the assessee is entitled to avail Modvat credit in respect of Ramming Mass. Fibre glass and filter mesh used or in relation to the manufacture of pistons on the ground that the same are covered under proviso to Rule 57A of the Rules. After referring to the book titled as "Electric Furnace Steel Making" published by the American Institute of Mining, the Supreme Court held : "Keeping the aforesaid manufacturing process in view and also bearing in mind that it is essential to control the acidic vapours generated during the steel manufacturing process, this Bench has held in C.A. No. 6615/2003 (Collector of Central Excise v. Steel Authority of India Limited) that use of such chemicals is essential for the manufacturing process. Specifically, it was observed that : "As discussed by the concerned authority burnt dolomite is used so as to neutralize the acid which is formed at the time of manufacturing stee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roducts, are not eligible for Modvat credit and the exclusion clause of Explanation to Rule 57A Ramming mass, Mortar, Castable Powder, Refractory, Foundry Fluxes and Chemicals are used as part of furnace. The Grinding Wheel is used as tool. Therefore, will not all these items be covered in the excluded category of items under Explanation to Rule 57A? (2) Whether the term machine, machinery, plant etc. have been used in the exclusion clause (1) of Rule 57A in a general sense and if their constituent are taken as inclusive inputs when the plant or machinery themselves are not, will not the exclusion become superfluous and meaningless?" 11.After making refererce to the manufacturing process and Rule 57A of the Rules, the Court held as under :- "A perusal of the rule reproduced above shows that the modvat can be availed on the goods used in or in relation to the manufacture of the final product, whether directly or indirectly and whether contained in the final product or not. The expressions "used in or in relation to the manufacture of the final product", "whether directly or indirectly" and "whether contained in the final product or not" are wide enough to cover the good ..... 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