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2001 (1) TMI 547 - AT - Central Excise
Issues:
1. Whether the use of oxygen/acetylene gases in cutting scrap of Iron & Steel is an integral part of the manufacturing process for final products? Analysis: The Commissioner of Central Excise, Chandigarh, filed applications seeking to refer a question of law to the High Court regarding the eligibility of oxygen/acetylene gases as inputs for Modvat credit in the manufacturing process of steel ingots and steel castings. Despite the absence of the Respondents, the ld. DR argued that the use of these gases in cutting steel pieces is not directly connected to the final production of ingots and castings. Reference was made to previous Tribunal decisions highlighting conflicting views on the issue. The ld. DR contended that the use of gases for cutting steel pieces is a separate process from the manufacturing stage, citing precedents such as Pronts Ltd. v. C.C.E. and C.C.E., Chandigarh v. Vimal Alloys Ltd. The ld. DR also mentioned a Civil Appeal filed in a similar matter before the Supreme Court. The Tribunal analyzed the submissions and records, concluding that cutting scrap into proper size and shape using oxygen/acetylene gases is an essential and integral part of the manufacturing process for final products like steel ingots and castings. Reference was made to past decisions where Modvat credit was allowed for gases used in cutting steel billets for manufacturing bars and rods. The Tribunal acknowledged the conflicting views among different Benches but relied on the case law to support the eligibility of oxygen/acetylene gases for Modvat credit. In light of the varied decisions and the importance of the issue, the Tribunal deemed it appropriate to refer the question of law to the High Court for clarification. Consequently, the Tribunal allowed the reference application and referred the key question to the Hon'ble High Court of Punjab and Haryana for a definitive ruling on the eligibility of oxygen/acetylene gases as inputs for Modvat credit in the steel manufacturing process.
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