1991 (1) TMI 278 - AT - Central Excise

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Eligibility for Modvat credit on various goods used in the manufacture of cement.

Summary:

Condonation of Delay:
The appeal by M/s. Associated Cement Companies Ltd. was received one day late due to postal transit. The delay was condoned as there was no objection from the respondent.

Eligibility for Modvat Credit:
1. Grounds of Appeal:
The appeal challenged the order of the Collector of Central Excise (Appeals), which rejected their application for Modvat credit on various goods. The Collector (Appeals) had allowed Modvat credit only for grinding media, dismissing the rest based on a previous decision relating to another factory.

2. Appellants' Argument:
The appellants argued that Modvat credit u/s 57A covers a broader range of excisable goods than Notification No. 201/79 and Rule 56A. They cited several judgments, including J.K. Cotton Spinning and Weaving Mills Company Ltd. v. Sales Tax Officer, to support their claim that the term "used in the manufacture of" should encompass a wider range of goods.

3. Respondents' Argument:
The respondents contended that the goods in question fall under the excluded category of inputs as per the explanation clause in Rule 57A. They referenced a previous similar appeal by the same appellants that had been rejected.

4. Tribunal's Analysis:
The Tribunal reviewed the cited judgments and previous decisions. They noted that the Supreme Court in J.K. Cotton had held that the expression "used in the manufacture of" should cover the entire process of converting raw materials into finished goods. However, they distinguished between goods used in the manufacturing process and those used as manufacturing apparatus, the latter being excluded from Modvat benefits.

5. Specific Findings:
- Chemicals for Water Treatment: Eligible if used in the manufacturing process, not for non-manufacturing purposes like drinking water.
- Goods for Mining: Eligible if the manufacturer is engaged in mining operations as part of an integrated process.
- Maintenance and Structural Goods: Not eligible as they are not used in or in relation to the manufacture of cement.

Item-wise Decisions:
- Cement (Ch. 25): Not eligible for internal use.
- Solid Fuel from Coal (Ch. 27): Not eligible.
- Phospho-gypsum (Ch. 28): Eligible, not under appeal.
- Oxygen Gas (Ch. 28): Not eligible for plant repair work.
- Hydrochloric Acid (Ch. 28): Not eligible for power house use.
- Sulphuric Acid (Ch. 28): Not eligible for charging batteries.
- Caustic Soda (Ch. 28): Not eligible for captive power plant.
- Bleaching Powder (Ch. 28): Not eligible for drinking water purification.
- Paints & Varnishes (Ch. 32): Not eligible for industrial structures.
- Explosives (Ch. 36): Eligible for quarrying if used in their mines.
- Refractory Cement (Ch. 25): Not eligible for kiln lining.
- Rubber and Rubber Products (Ch. 40): Not eligible for equipment.
- Conveyor Belts (Ch. 40): Not eligible for material transportation.
- Tyres and Tubes (Ch. 40): Not eligible for vehicles.
- Articles of Leather (Ch. 42): Not eligible for safety equipment.
- Sal Wood (Ch. 44): Not eligible for packing.
- Grinding Wheels (Ch. 68): Not eligible for workshop use.
- Asbestos Material (Ch. 68): Not eligible for general maintenance.
- Fabricated Materials (Ch. 69): Not eligible for kiln lining.
- Glassware (Ch. 70): Not eligible for laboratory use.
- Iron & Steel (Ch. 72): Not eligible for structural maintenance.
- Railway Construction Material (Ch. 73): Not eligible for factory tracks.
- Pipe & Fittings (Ch. 73): Not eligible for maintenance.
- Copper Wire (Ch. 74): Not eligible for electrical maintenance.
- Zinc & Articles (Ch. 79): Not eligible for mill repairs.
- Tin & White Metal (Ch. 80): Not eligible for bush repairs.
- Tools (Ch. 82): Not eligible for equipment maintenance.
- Electrodes (Ch. 83): Not eligible for general maintenance.
- Bolts & Nuts (Ch. 83): Not eligible for repairs.
- Machinery Spare Parts (Ch. 84): Not eligible for maintenance.
- Roller & Ball Bearing (Ch. 84): Not eligible for maintenance.
- Spares for Electrical Equipment (Ch. 85): Not eligible for repairs.
- Spares for Locomotive (Ch. 85): Not eligible for repairs.
- Parts/Accessories of Motor Vehicles (Ch. 87): Not eligible for maintenance.

Conclusion:
The appeal was disposed of with specific findings on the eligibility of each item for Modvat credit.