1995 (11) TMI 182 - AT - Central Excise

Summary

Issues Involved:
1. Denial of MODVAT Credit on various inputs including sodium silicate, acetylene gas, graphite stopper heads, ramming mass, tundish boards, Meta Seal/pack, Accosets, Thermocouple Tips, Sleeves, Nozzles, Blocks, Bricks, Roof Sets, Copper Mould Tubes, Grinding Wheel, Casting Powder, Oxygen, Refractory materials, and Firecrete Super.

Issue-wise Detailed Analysis:

1. Denial of MODVAT Credit on Sodium Silicate, Meta Seal/pack, Accosets, Ramming Mass, Casting Powder, Refractory Materials, and Firecrete Super:
The appellants argued that these items are used as inputs in the manufacturing process and should be eligible for MODVAT Credit under Rule 57A. The Calcutta High Court in Singh Alloys & Steels Ltd. v. ACCE and the Tribunal in Collector v. A.B. Tools had ruled that ramming mass is eligible for MODVAT Credit. The Tribunal agreed with the appellants, stating that these items function similarly to ramming mass and should be considered chemicals, not machinery. Thus, the denial of MODVAT Credit on these items was set aside.

2. Denial of MODVAT Credit on Acetylene Gas and Oxygen:
The issue was decided in favor of the appellants, referencing previous decisions in M/s. Mukund Iron & Steel Works v. Collector, M/s. Jyoti Steel Industries v. Collector, L & T v. Collector, and Transformers & Electricals Kerala Ltd. v. Collector. These items were deemed used in relation to the manufacture of the final product, and the Tribunal found no reason to deny MODVAT Credit. Thus, the denial was not justified, and these items were held eligible for MODVAT Credit.

3. Denial of MODVAT Credit on Tundish Boards:
The Tribunal referenced its decision in Shimoga Steel Ltd. v. Collector, which held tundish boards as not eligible for MODVAT Credit. Following this precedent, the denial of MODVAT Credit on tundish boards was sustained.

4. Denial of MODVAT Credit on Thermocouple Tips:
The appellants cited Trade Notice No. 41/89 and the decision in W.S. Ind. (India) Ltd. v. Collector, arguing that Thermocouple Tips get consumed during the manufacturing process and should be eligible for MODVAT Credit. The Tribunal agreed, noting that these items are used in relation to the manufacture and get consumed in the process. Thus, the denial of MODVAT Credit on Thermocouple Tips was set aside.

5. Denial of MODVAT Credit on Graphite Stopper Heads, Sleeves, Nozzles, Blocks, Roof Sets, Copper Mould Tubes, and Grinding Wheels:
The appellants conceded that these items would not be eligible for MODVAT Credit. The Tribunal confirmed the denial of MODVAT Credit on these items, referencing the decision in Collector v. Raipur Alloy Steels Ltd. for refractory bricks and the categorization of grinding wheels as part of machinery. The Tribunal also noted that nozzles and sleeves are instruments or apparatus, falling within the excluded category.

Conclusion:
The appeals were allowed for sodium silicate, acetylene gas, ramming mass, Meta Seal/pack, Accosets, Thermocouple Tips, Casting Powder, Oxygen, Refractory materials, and Firecrete Super, granting MODVAT Credit. The appeals were rejected for Graphite Stopper Heads, Tundish Boards, Sleeves, Nozzles, Blocks, Bricks, Roof Sets, Copper Mould Tubes, and Grinding Wheel, denying MODVAT Credit.