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TMI Blog1995 (5) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... by M/s. B.D.A. Steels Pvt. Ltd., Jalandhar and M/s. Mohta Alloys & Steel Works, Ludhiana who are respondents in the present proceedings and held them to be eligible for Modvat benefit in respect of Ramming mass, hot tops, nozzle setting compound and hard coke powder. Such benefit had been held to be inadmissible for the said items by the Assistant Collector, Jalandhar and Ludhiana respectively holding them to be not inputs used in or in relation to the manufacture of their final products i.e. iron and steel products namely steel ingots. The said orders of the two Assistant Collectors were set aside by the Collector vide her impugned order wherein she observed that the excluded category of inputs under Rule 57A does not include Ramming mass. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opper nozzles which are fixed to the ladle. It is, therefore, urged that the compound cannot be considered to be used in or in relation to the manufacture of final product. It is used for maintenance of the apparatus/equipment. 4. As regards ramming mass, it has been submitted that it is a material used for the maintenance and repair of hearth of the furnace which can be treated as a part of furnace/machinery. Since no modvat is available on parts of machinery, no modvat credit was admissible on ramming mass used for maintenance of furnace. As far as Hard coke powder is concerned, it is a carbonising material basically made of coke and does not lend any specific quality which may make it classifiable as inputs in terms of Rule 57A. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xclusion by referring to items used in the machinery or as machinery or for the machinery. The items should be machinery in order to attract the exclusion. He referred to the Tribunal's order in Collector of Central Excise, Chandigarh v. A.B. Tools Ltd. wherein it has been held that Ramming Mass is used in relation to the manufacture of Steel Ingots and is to be considered as an eligible input for the purpose of availing of Modvat. Shri Bedi then stated that Hot Tip is a chemical which melts during the operations and becomes part and parcel of the Steel Ingots. He pleaded that the order-in-appeal be upheld and the revenue's appeal dismissed. 6. We have considered the submissions. We find that the item Ramming Mass is specifically cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alcutta High Court. They actually distinguished the two cases observing that the said judgment was distinguishable on facts in regard to the nature and use of the inputs. The observation of the Collector (Appeals) was extracted which is reproduced below. It was upheld, observing that he had given cogent reasons on the question of Modvat eligibility of the inputs. "On going through the explanation submitted by the party, it is seen that essentially these materials are being utilised as a protective refractory and not as a raw material, consumable or such item which could be deemed to be directly utilised in the manufacture of finished product, viz., Ferro Alloys. As explained by the party, during the process of manufacture these materials w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligibility. Direct utilisation in the manufacture of the finished product has been referred to in the order of the Collector of Appeals extracted above. The requirement of Rule 57A is that the goods should be used in or in relation to the manufacture of the final product. Direct utilisation is not a valid test to be applied to decide eligibility of modvat credit. 8. We find there is a reference in the M.B. Smelters order to a decision of the West Regional Bench of the Tribunal distinguishing the Calcutta High Court judgment. Though there is no citation of the said decision of the West Regional Bench, we feel the reference is to B.K. Paper Mills v. Collector of Central Excise reported in 1993 (68) E.L.T. 452. Para 8(1) of their order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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