TaxTMI 
TaxTMI 
2004 (12) TMI 104
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....ot only items like machine, machinery, equipment, and apparatus but also parts thereof? (iii) Whether the majority view 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 b....
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....cluded from Modvat coverage in terms of Explanation to Rule 57A of the Rules when they fall for classification under Chapter 69 (covering ceramics) and not Chapters 84 or 85, which cover machines machinery is no longer 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 a....
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....tral Excise - 1996 (88) E.L.T. 314 (S.C.) = AIR 1996 SC 2544, the Supreme Court considered whether the appellant was entitled to concessional rate of duty on raw naphtha used for manufacturing fertiliser and answered 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....
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....allowed credit on the duty paid in respect of the input. On the explosives a duty had been paid and the appellant would be entitled to claim credit because the explosives were used for the manufacture of the 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 ....
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.... Whether Machine, Plant, Apparatus, Tools or Appliances etc. used for producing or processing of any goods or for bringing about any chance in an substance in or in relation to the manufacture of final products, 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 ind....