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TMI Blog1991 (1) TMI 278X X X X Extracts X X X X X X X X Extracts X X X X ..... him filed by their Khalari Cement Works challenging the decision of the Assistant Collector of Central Excise, Ranchi Division rejecting their application for availing Modvat benefit in respect of various goods claimed to be used in or in relation to the manufacture of cement. The Collector (Appeals) had partly allowed their appeal to the extent of granting the benefit only in respect of grinding media but dismissed their appeal otherwise. He has gone by his previous decision relating to another factory of theirs at Chaibasa and observed that as the issues were identical, he applied the same order. A copy of the said order was incorporated in his order which is the subject matter of the present appeal. A statement showing the products, the Chapter number under which they fall for classification and their use in or in relation to the manufacture of cement furnished by the appellants was also enclosed to the impugned order. The list is appended to this order with our findings on their eligibility for Modvat benefit. The grounds on which the Collector (Appeals) had held the products in question to be ineligible for the benefit of Modvat discussed in his earlier order in the appeal re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture of the particular output. This wider scope of admissibility would support their case, he pleaded. 7. Sri M.N. Biswas, learned SDR, opposed the submissions made in support of the appeal. He contended that the inputs in question which are sought to be covered under the Modvat Scheme belong to the excluded category of inputs as per the explanation clause in Rule 57A. They are thus outside the scope of Modvat benefit. He referred to a decision of this Bench in a similar matter whereunder a similar appeal of the same appellants had been rejected [1990 (50) E.L.T. 295 (Tri.) - Order No. 221/Cal/1990-221 dated 11-5-1990 in appeal No. E-128/88]. He, therefore, pleaded that on the same basis the present appeal may be rejected. 8. We have given careful consideration of the submissions made on behalf of both the sides. We have perused the record. We have also gone through the judgments cited. We find that, as pointed out by Sri Biswas, SDR, the appellants had filed a similar appeal earlier which has been rejected by us. The decision dated 11-5-1990 has recently been reported in 1990 (50) E.L.T. 295. In that appeal the Supreme Court judgment in the J.K. Cotton matter (Sl. No. 1 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the place where the mining operations are concluded to the factory where the manufacturing process starts. The process of mining ore and manufacture with the aid of such ore, copper goods, is an integrated process and there would be no ground for exclusion of the vehicles used for removing goods to the factory after the mining operations are concluded. Accordingly, they reversed the finding of the Patna High Court excluding locomotives and motor vehicles used by them after the mining operations were concluded and before the manufacturing process commenced and also vehicles used for carrying finished products from the factory on the conclusion of the process of manufacture. The High Court had held that these vehicles were not intended for use in the manufacture or processing of goods or in the mining operations. It was this view which was reversed by the Supreme Court, goods intended for use inter alia in mining being also covered by the relevant provisions. The Supreme Court, however, held, while rejecting the claim for the grant of benefit to hospital equipments and fittings/furnishing, medical supplies and stationery that the expression intended to be used cannot be equated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t case of Collr. of C. Ex. v. Ballarpur Industries Ltd., wherein only the attempt to dissect the process of manufacture of pulp and manufacture of paper therefrom was disapproved. In the earlier case of Indian Copper Corporation even mining and manufacture if carried on by the same dealer have been considered to be an integrated process. Though the judgment was in the context of Central Sales Tax, provisions whereunder cover not only goods intended for use in manufacture but also in mining, the observations of the Supreme Court that mining operations and manufacturing process are interdependent and constitute an integrated process would not be confined to only the Sales Tax matters but be applicable in respect of Rule 57A of Central Excise Rules relating to Modvat also. It is noteworthy that the eligible inputs are not only goods used in the manufacture of final products but also those used in relation to the manufacture. The mining of the minerals used in the manufacture is in relation to the latter and in view of the observations of the Supreme Court treating the two operations carried on by the same person as integrated process, goods which are otherwise eligible for Modvat bene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sives as even without such treatment, water can be boiled and steam produced. We are not inclined to agree with this submission, since we find that in Fertiliser Corporation of India Limited v. Collector of Central Excise, Patna, decided by the Tribunal and reported in 1987 (12) ECR 535 it was held that use of sulphuric acid in the manufacture of Sodium Hexameta Phosphate for water treatment essential for manufacturing fertiliser amounts to ultimate use in the manufacture of fertiliser. The particular exemption was in respect of sulphuric acid used for manufacture of fertiliser. Even though part of sulphuric acid was used as stated above for the manufacture of a chemical which was required only for water treatment, it was held to be essential for the manufacture of fertiliser and, therefore, amounts to ultimate use in the manufacture of fertiliser. Following the above decision we hold that the chemicals used for treatment of water for production of steam would entitle the appellants to derive the benefit admissible to materials required for the manufacture of explosives. Accordingly, we allow the appeal. The appellants would be entitled to consequential benefits . However, if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in relation to manufacture but for equipment. 13 Rubber and Rubber products 40 Floatation cell parts. Packing house spouts. - Equipment not included in input under Rule 57A explanation. Not eligible 14. Rubber hose Tubes 40 Drilling in Quarry moulding shop furnaces - Appliances. Not eligible 15. Conveyor Belts 40 General Material transportation. - Equipment. Not eligible 16. Tyres 40 Quarry, Motor vehicle, vehicles - Not used in or in relation to manufacture. Not eligible. 17. Tubes 40 -do- - -do- 18. Articles of Leather 42 Hand gloves for safety purposes shoes for safety - Equipment. Not eligible 19. Sal Wood (Wooden planks) 44 For packing of stores spares crating purposes (house hold effects, house building) - Not used in or in relation to manufacture. Not eligible. 20. Grinding Wheels 68 Workshop use - Not used in or in relation to manufacture . Not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X
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