1997 (10) TMI 163 - AT - Central Excise

Summary

Issues:
Classification under Notification No. 217/86, Exclusion under Rule 57G(1), Benefit of Notification No. 118/75, Interpretation of "inputs" in Rule 57A and notification, Exclusion of goods under machines or machinery category, Applicability of previous judgments on similar issues.

Classification under Notification No. 217/86:
The appellants manufactured refractory bricks and mortars for lining furnaces and claimed benefit under Notification No. 217/86. A show cause notice was issued later, alleging the goods were not used for manufacturing the final product and no declaration under Rule 57G(1) was filed. The Assistant Collector denied the benefit based on an Explanation. The Tribunal analyzed the notification's conditions and upheld the denial.

Exclusion under Rule 57G(1):
The appellants argued that not filing a declaration under Rule 57G(1) did not affect the benefit under the notification. The Tribunal agreed, stating that being a Modvat user was not a requirement under the notification. Previous judgments on exclusion under Rule 57A were considered for interpretation.

Benefit of Notification No. 118/75:
The appellants referenced a previous judgment extending benefits under Notification No. 118/75 to the same goods used in a similar manner. However, the Tribunal found the conditions of Notification No. 217/86 more stringent, thus the previous judgment did not apply.

Interpretation of "inputs" in Rule 57A and notification:
The Tribunal compared Rule 57A and the notification, noting the similarity in the phrase "inputs" and the exclusion clause. It clarified that being a Modvat user was not a prerequisite for the benefit under the notification, contrary to the argument based on Rule 57G(1).

Exclusion of goods under machines or machinery category:
The issue of whether the contested goods fell under the exclusion category of machines or machinery was raised. The Tribunal referred to previous judgments where similar items were considered eligible inputs, concluding that the exclusion clause did not apply to refractory products and cement used for lining furnaces.

Applicability of previous judgments on similar issues:
The Tribunal considered previous judgments regarding the interpretation of exclusion clauses under Rule 57A in relation to the exclusion under the notification. It held that the judgments were directly applicable in interpreting the cited notification, supporting the appellants' claim for the benefit.

In conclusion, the Tribunal held that refractory bricks and mortars were used in manufacturing and procedural requirements of Modvat did not impact the benefit under the notification. The appeal was allowed, setting aside the lower order and directing consequential benefits to the extent claimed.