2000 (2) TMI 117 - AT - Central Excise

Summary

Issues:
Eligibility for Modvat credit in respect of 'Grinding Media'.

Analysis:
The case was referred to a Larger Bench to decide the eligibility for Modvat credit concerning 'Grinding Media'. The Larger Bench considered a similar issue in a previous case and referred to another decision. The Bench observed that Steel Balls (Grinding Media) used in Ball Mills are considered "inputs" in the manufacture of Cement. The Steel Balls are essential for the grinding process in the Ball Mill and become part of the final product. Despite being consumed to some extent, they are not considered raw materials but are crucial for the manufacturing process. The Steel Balls are not parts or components of the Ball Mill but are necessary for its operation. The decision in a previous case regarding the exclusion clause and Modvat credit admissibility was cited, emphasizing that Steel Balls are indeed "inputs" and not excluded. The reasoning in other cases was deemed incorrect, and the appeal was disposed of in line with the earlier decision.

The statements made by the Larger Bench in the previous case were considered binding. The Bench found no reason to doubt the decision made by the Larger Bench. As the issue raised in the current appeal was covered by the earlier decision, the appeal was resolved based on that decision. The judgment reiterated the importance of Steel Balls (Grinding Media) as inputs in the manufacturing process of Cement and clarified their role in the machinery used for grinding. The decision highlighted the significance of Steel Balls for the grinding process and their classification as essential goods for the Ball Mill's performance. The judgment emphasized the distinction between Steel Balls as inputs and parts or components of the Ball Mill, reinforcing their eligibility for Modvat credit.