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TMI Blog1989 (12) TMI 189X X X X Extracts X X X X X X X X Extracts X X X X ..... AT benefit in respect of the aforesaid duty paid inputs on the ground that they are not admissible under the relevant rules in MODVAT scheme. In the adjudication proceedings initiated by the Assistant Collector, it was held that these inputs are not eligible for availment of MODVAT credit and confirmed the demands raised under the show cause notices dated 3-10-1987,6-1-1987,16-4-1987, 23-4-1987, 6-7-1987, 6-10-1987, and 4-11-1987. In the said order, he allowed the MODVAT benefit in respect of duty in respect of graphite electrodes alongwith nipples to the extent of Rs. 1,27,020.60 and also Rs. 8838.00 being the credit taken on thermocuple tips. Against the said order, the appellants went in appeal before the Collector of Central Excise (Appeals), which was rejected. The present appeal is against the order of the Collector of C. Ex. (Appeals). 4. Shri T.R. Andhyarujina, the learned senior advocate for the appellants, at the outset stated that in the case of refractories, the mater has already been argued by him and the issue also has been decided in favour of the revenue under order No. 617/89 dated 4-7-89 [printed in 1990 (45) E.L.T. 84]. Since the issue is already settled, he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ire clay, even as per their write up, are used for lining the furnace and ladles for heat resistance and they also on par as refractory materials, he conceded that the ratio of the decision would be applicable to these two materials as well. In view of this position, no arguments were advanced. Therefore, following the ratio of the decision in this Bench order No. 617/89WRB dated 4-7-1989 we hold that magnesite ramming mass, fire clay and refractory bricks are not eligible for MODVAT credit and demands issued denying the MODVAT credit on these three inputs by the department are therefore sustainable. II. Acetylene Gas 8. Acetylene gas is used in combination with oxygen gas for removing runners and risers and excess material, which come along with castings when taken out of the sand moulds. The burning of oxygen gas and acetylene gas gives a high temperature flame. The oxygen and acetylene gas pass through the medium of a torch and in that process the runners and risers and other excess materials are separated. The learned senior advocate contended that the findings of the authorities below that they are not used in or in relation to the manufacture of castings is not correct. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as a tool or whether it is an input for tool and gets excluded from the purview of explanation to Rule 57A. We are also to consider the question as to whether the Acetylene gas is used in or in relation to the manufacture of castings. Taking this question first, we are inclined to agree with the learned senior advocate that castings cannot be said to be complete, unless the excess portion of runners and risers are removed. This unwanted portion has to be precisely cut and taken out and for that flame cutting is the one method for precise cutting of metal. Since, in that process, acetylene gas is used for removing the unwanted portion of the castings, it can be said to be used in or in relation to the manufacture of the finished product. We, therefore, agree with the view of the learned senior advocate that Acetylene gas is used in or in relation to the manufacture of the finished product. Even as per the definition of manufacture as laid down in Section 2(f) of the Central Excises and Salt Act, 1944, it includes any process incidental or ancillary to the completion of a manufactured product. Since the process of removal of unwanted material from the castings is an essential ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... senior advocate contended that the department s stand that the moulds and cores are in the nature of equipments and the inputs used in the preparation of the equipment are not eligible to MODVAT is not tenable because these moulds are highly unstable. They cannot be compared to machines and other equipments of stable nature as specified in the Explanation to Rule 57A, which talks only about the machines, machinery, plant, equipment, apparatus. These are of durable nature and capable of repeated use. He also contended that the moulds which are highly unstable and are required in the process for the manufacture of castings could be regarded as intermediate goods and by virtue of Rule 57D of the Central Excise Rules, credit of duty paid on inputs used in the preparation of the moulds is required to be extended for the final product castings. 15. Shri K.M. Mondal, the learned SDR, on the other hand, contended that sand moulds are only in the nature of equipments. It is not necessary for the purpose of considering the explanation to Rule 57A, whether the equipments are capable of repeated use or of one time use. What is required to be looked into is whether the moulds are in the natu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as coming in the category of equipment, apparatus or appliances. We also note that there is a specific exemption given to sand moulds classified under heading 84.80. In view of this position, we are convinced that the sand moulds are in the nature of equipment or apparatus used for the purpose of castings. It is not the case of the appellants and no arguments have been advanced before us that sand moulds go into the product stream and occur at an intermediate stage. Admittedly, they are produced independently and used for castings. Hence their arguments that it should be construed as an intermediate product occurring during the course of manufacture does not carry conviction. Even as per the provision of Rule 57D(2) the credit of duty cannot be denied on the ground that any intermediate product has come into existence during the course of manufacture of the final product. In this case, moulds cannot be considered to have come into existence during the course of manufacture of the final product. Hence the benefit of Rule 57D cannot also be extended. We, therefore, hold that binders and foundry chemicals are not eligible for MODVAT credit. The demands issued by the department denying ..... X X X X Extracts X X X X X X X X Extracts X X X X
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