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TMI Blog1990 (3) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... all the proceedings below as well as in the appeal itself) and industrial cloth cannot be called either tools or appliances as held by the Assistant Collector in his order which was challenged in appeal before him and as such the benefit of Modvat credit would be admissible for such wire mesh and industrial cloth used in or in relation to the manufacture of paper. The Assistant Collector, in his impugned order, had held that endless PB wire mesh (wire mass in the order) cannot be treated as inputs because it falls under the category of tools and appliances. He has observed that it is thrown away after 10 or 12 days, that it is used again and again and that it does not also form part of the finished goods. As regards industrial cloth it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thereafter the milk-like fibre held in suspension is fed in a broad uniform stream on to an endless wire cloth which travels forward on horizontally at a regular speed determined by the quality of the paper being produced. The amount of water added to the pulp as it flows on to the wire depends upon the thickness of the paper to be made and the speed at which the machine is to run. In its forward travel the wire cloth is given a slight side shake in order to reduce the tendency of the fibres to settle parallel to the direction of travel. As the pulp is carried forward on the wire it loses most of its water and in order to assist this action the wire, towards the end of its travel, is made to pass over two or three suction boxes which extr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been pleaded that the order of the Collector (Appeals) may be set aside and the Order-in-Original passed by the Assistant Collector restored. 3. When the appeal was posted for hearing, Shri M.N. Biswas, learned S.D.R. appearing on behalf of the appellant Collector submitted that it has to be conceded that the items in question are, no doubt, used in relation to the manufacture of paper but he added, so are machinery and equipment. The wire mesh and industrial cloth are used as attachment or part of the machine. They perform a specific function of drawing out the water for demoisturising the pulp. He contented that the item will be covered by the expression appliance because of its specific function. Even otherwise, it will be covered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... J 452 SC) lays down that if a notification does not exclude from exemption altogether manufactures made partly from duty paid and partly out of non-duty paid inputs, the exemption cannot be denied on the reasoning that the sheets, circles etc. had not been manufactured wholly and solely out of duty paid slabs. Likewise, in the other matter concerning Tisco (1977 E.L.T. J 61 SC) it was held by the Supreme Court that when duty paid pig iron is mixed with non-duty paid pig iron the set-off cannot be refused on the ground that the non-duty paid material has also been utilised. I find these judgments do not have any bearing on the present issue where the question for decision is whether the goods - Wire Mesh and Industrial Cloth are in the natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture.......... only. 7. The Assistant Collector was clearly in error in looking for and applying the criterion of presence of the goods in question in the finished product, paper. But the contention raised by the Counsel that the enlargement of the other criterion of use in the manufacture of the finished product to cover goods also used in relation to the manufacture of the finished product does not give any added weight to their case. Even without the expanded scope of the coverage, the goods came within the scope of the expression used in the manufacture.. . The Supreme Court had dealt with this question in their judgment in J.K. Cotton Spinning and Weaving Mills Company Ltd. v. Sales Tax Officer [1965 (16) STC 563 SC] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... moisture from the pulp as pointed out by the learned SDR. Such goods in the nature of appliances which are part of machines which produce the paper are not covered by the term inputs . 9. The objection taken by the learned Counsel for the respondents that the facts urged in the appeal are different from those taken in the Show Cause Notice and adjudication order has no merit. The Assistant Collector had held that the materials in question fall in the category of tools and appliances and accordingly do not qualify for Modvat benefit. As this view was set aside in the Order-in-Appeal by the Collector (Appeals), the appeal against that order has been filed incorporating the reasons why the Order-in-Appeal is not acceptable and why it requir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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