1999 (9) TMI 301 - AT - Central Excise

Summary

Issues involved:
I. Interpretation of Notification No. 177/86 regarding eligibility for Modvat credit on specific items such as Gunny Cuttings, Cotton Thread, Synthetic Cloth, etc.
II. Eligibility of Ream Labels as an intermediate product for availing Modvat credit.
III. Eligibility of Oxygen Gas, Soldering Stick, and Dissolved Acetylene Gas as inputs under Rule 57A.
IV. Allowance of Modvat credit on items like Vikery Invc. Flex Doctor Blades, Alboney type shower, etc., as spares/components of machinery.
V. Eligibility of Refractory Bricks and Cement as Modvat inputs.
VI. Scope of the Tribunal's order in relation to items not covered by the original authority's decision.

Detailed Analysis:
I. The Tribunal addressed the issue of items like Gunny Cuttings, Cotton Thread, and Synthetic Cloth not being specified inputs under Notification No. 177/86. Despite contentions that Gunny Cuttings are raw materials for paper manufacturing and Synthetic Cloth is an unspecified input, the Tribunal held that these items are not eligible for Modvat credit due to not being specified goods under the notification.

II. Regarding Ream Labels, the Tribunal considered them as used in the manufacture of paper and eligible for Modvat credit, citing the explanation to Rule 57A. The Tribunal noted that this argument was not raised before them and deemed it not arising from their order.

III. Oxygen Gas, Soldering Stick, and Dissolved Acetylene Gas were discussed in the context of welding/soldering machinery. The Tribunal held these items ineligible under Rule 57A, aligning with a decision of the Calcutta High Court and a Larger Bench judgment in the case of Union Carbide.

IV. The Tribunal allowed Modvat credit on items like Vikery Invc. Flex Doctor Blades, Alboney type shower, etc., as spares/components of machinery, contrary to the original authority's decision. This decision was based on the Union Carbide judgment, which the Tribunal referenced for a similar case involving various inputs.

V. Refractory Bricks and Cement were deemed ineligible as Modvat inputs due to being excluded items under Rule 57A. The Tribunal disagreed with the original authority's decision and upheld the respondents' plea that these items were used for furnace or boiler, without further elaboration.

VI. The Tribunal clarified the scope of its order in relation to items not covered by the original authority's decision. It emphasized that parties could seek redress for other items through a Review Application, indicating that the Tribunal's order was limited to the items specified in the original decision.

In conclusion, the Reference Applications were rejected by the Tribunal, addressing various issues related to Modvat credit eligibility for specific items and interpreting the applicability of Rule 57A under Notification No. 177/86.