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TMI Blog1990 (4) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... the result of manufacture, with the inputs, is machinery, equipment, appliance etc. then such inputs cannot be said to be used in the making of steel castings. Machinery, plant, equipment, appliances etc. are not covered by the word 'input' used in Rule 57A of the Central Excise Rules. Appellants have stated that sand mould is not an equipment, because it is not used repeatedly in making of steel castings. This contention is not correct. Equipment need not be for repeated use, in manufacturing the finished product. The dictionary meaning of the word "equipment" as per Concise Oxford Dictionary is "provide (oneself with) for journey etc., - hence equipment." The word 'Appliance' means "thing applied as means to an end". Thus, the sand mould, is both an equipment and more appropriately an appliance. The casting is made with application of such sand moulds. The inputs brought, duty paid, and used in making an equipment or appliance cannot be said to be used in or in relation to the manufacture of the final or finished product by the appellants." 4. The learned C.A. for the appellant pleaded that the appellants had brought in specified inputs in their factory in which they are manufac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d provides improvement in the quality of steel making. Hence he emphasises on the need for extension of MODVAT benefit since it cannot be equated with machinery or capital goods because of these distinctive functions. While this claim is considered later in detail, at this juncture, even admitting that these refractories participate in the chemical process and contribute to improvement in quality of steel making, it cannot be denied that these refractory bricks and other materials are used in the inner surface of these machines and equipments by lining the entire surface and cementing them so as to provide heat resistance and corrosive resistance lining for these machines and equipments. In that sense they could be broadly called a constructional material for lining the machine to effectively perform, by withstanding the heat and chemical reaction. They are more in the nature of constructional material required for lining the machines and equipment, than in the nature of material fed into the furnace for chemical reaction or for improving the quality of steel making. When this point is clear, that they go as a constructional material for lining the machine or equipment, even if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eral understanding of the term 'intermediate goods' is that these emerge in the manufacturing stream of a product as something which on further being processed, yield the final product in a manufacturing unit. The term 'intermediate goods' cannot mean the goods which are independently prepared and are not manufactured in the course of manufacture of finished product in the manufacturing stream. The term 'intermediate' has been defined in the Chambers' Dictionary as under: "placed, occurring or classified between others, extremes, limits, or stages: of igneous rocks, between acid and basic in composition:intervening. - n. that which is intermediate; any compound manufactured from a primary that serves as a starting material for the synthesis of some other product;" and in Concise Oxford Dictionary as under: "coming between two things in time, place or order; intermediate thing; compound formed by one reaction and then taking part in another esp. during synthesis of commercial products;" It would appear from the above that sand moulds manufactured by the appellants used in the manufacture of castings do not qualify as intermediate goods. In the context of where some inputs which h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of manufacture to be carried a step further. The inputs used in these processes for manufacture of the products which are in turn used in the manufacturing stream of the finished product can be taken to have been used in the manufacture or in relation to the manufacture of the finished product. Generation of steam which ultimately participates in the manufacturing processes is one such item. The other may be pre treatment of the raw material which go into the manufacturing stream or the materials which may be used for making the end product ready for marketing. The use of the materials has to be such that they carry by their participation, in the manufacturing stream the process of manufacture a step further." In that case we have also considered the question of use of inputs in the machines, machinery, etc., which are employed in the manufacturing process of a specified finished product and have held that the specified inputs going into the machinery, equipment, tools, etc. would not be eligible for the benefit of the MODVAT credit. We have held as under in that case:- "So far as dandy covers, wire netting and woollen felts are concerned these are essentially parts of the paper ..... X X X X Extracts X X X X X X X X Extracts X X X X
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