2004 (4) TMI 124 - AT - Central Excise

Summary

Issues:
Whether the benefit of Notification No. 67/95-C.E. is available to the company in respect of lead sheet and wires used captively in the lining of storage tank.

Analysis:
The appeal filed by the Revenue questioned the availability of the benefit of Notification No. 67/95-C.E. to the company for using lead sheet and wires in the lining of storage tanks. The Revenue argued that lead sheets are not capital goods as per the Central Excise Tariff Act and Central Excise Rules. However, the Commissioner (Appeals) set aside the demand, stating that the tanks, with lead sheet lining, are used for storing Zinc Sulphate solution, which is a final product. The Revenue contended that since the manufacturing process is completed before storage, the tanks are not used in relation to the manufacture of the final product, thus lead sheets and wires are not eligible for exemption.

The company's representative argued that lead sheets and wires are used to replace corroded tank linings due to the nature of the stored acid, which requires constant replacement. They emphasized that the storage of liquid products is part of the manufacturing process, and therefore, the tanks are indeed used in relation to the manufacture of the final product.

After considering both arguments, the Tribunal noted that the tanks are indeed used for storing Zinc Sulphate solution, and the lining needs replacement due to corrosion caused by chemical reactions. The Tribunal concluded that the lead sheets and wires used for replacing the tank lining are integral to the manufacturing process, as the process is only complete once the final product is stored. Consequently, the Tribunal found no grounds to interfere with the decision and dismissed the Revenue's appeal.