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TMI Blog1989 (2) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacturers of caustic soda lye through the processing of electrolysis. In the process of electrolysis, they use Coated Titanium Metal Anodes. They claimed the credit of duty paid on this under the MODVAT scheme. The Assistant Collector, while allowing the credit of duty paid on Graphite Anodes totally disallowed the credit of duty paid on Coated Titanium Metal Anodes. The matter was taken before the Collector (Appeals). The Collector (Appeals) held that the noble metal coating on the metal anodes is eligible for MODVAT credit since it gets consumed in the process, whereas hard core of the metal which is not getting consumed will not be eligible for MODVAT credit. Against this order both the department as well as M/s Gujarat Alkalies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vers packing materials of certain categories. The contention of Shri Mehta is that Titanium Metal Anode does not fall under any of the excluded category given in the explanation to Rule 57-A. It was also his submission that Titanium Metal Anodes is only a metal substitute for Graphite Anodes, the only difference being that Titanium Anodes stay for longer duration as compared to Graphite Anodes. When the department has not challenged the findings of the Assistant Collector extending the MODVAT benefit in respect of Graphite Anodes, which also performs identical function there is no justification for challenging the extension of MODVAT credit in respect of Titanium Anodes. He also cited the decision of the CEGAT Special Bench in the case of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cable Capital Goods and hence cannot be equated with consumable items deserving the extension of MODVAT credit. He also contended that under Rule 57-A, Capital Goods are specifically excluded. Since this is only a replacable plant item MODVAT credit should not be extended. 6. Shri Mehta contended that even with regard to replacable consumable item of apparatus like Pyrometer tips, MODVAT has been extended and in this connection he referred to letter No. 211/85/86-CX.6, dated 17-7-1987 of the Central Board of Excise and Customs reproduced in 1988 (33) E.L.T., Part II, Page T-21. According to this Board s direction, Pyrometer tips which are used as part of an apparatus called Pyrometer for measuring the temperature of molten iron-steel etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry are machines, machinery, plants, equipments, apparatus, tools or appliances. We are unable to appreciate that Anodes come under any of these items in the excluded category. It cannot be called as a machinery, plant or equipment or apparatus. The departments contention is that it is a fixed plant item. But there is no explanation from the department as to how it becomes a plant or machinery. Shri Arya has urged that it is in the nature of a consumable tool bit of an appliance. Even in regard to tool bits, items like Pyrometer tips, MODVAT credit have been extended as pointed out from the other side. When Graphite anodes are held to be eligible for MODVAT credit, an item performing the same function cannot be denied that benefit merely bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o is for manufacture of caustic soda lye. The decision is with regard to the Notification No. 201/79-C.E. where benefit is given in respect of duty paid inputs used in the manufacture as raw material or components. In the case of MODVAT credit, no such restriction of usage as raw material or components is prescribed. Even use in relation to manufacture is permissible so long as it does not get excluded by the explanation. Even in a restricted context under Notification No. 201/79-C.E., the Special Bench has taken the view that this item can be regarded as input and is eligible for exemption under Notification 201/79. Hence we are fortified that in the liberalised context of MODVAT rules without restriction of usage as raw material or compon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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