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TMI Blog1995 (8) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Concise Oxford Dictionary gives the meaning of the word `appliance as a thing applied as means to an end". Again Chambers Dictionary of Science and Technology, Revised edition by Collec and Dobson in page 63, states, lying upon another member by a flat surface . The meaning of the word `appliance is therefore to be taken in the sense that it is a particular item lying upon another member by a flat surface, and is used in relation to manufacture of polyurethane foam which is the product of the appellants. In the present case, there is no doubt about its application, inasmuch as grease proof paper is placed on the conveyor, upon which the constituents of polyurethane form are poured, as stated in detail by the Asstt. Collector and soon after the polyurethane foam is formed, the material is taken out and the paper therein is considered as waste. The grease proof paper is used in order to avoid sticking of polyurethane foam on the conveyor and has no other purpose whatsoever in the manufacture of polyurethane foam. Therefore, it is very clear that grease proof paper is used as an appliance and is squarely covered by the meaning of the word appliance, as given in the Concise O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lves in appreciating the scope of the term used in or in relation to the manufacture and which have a wide connotation and unless it could be shown that the goods fell within the excluded categories as set out under Rule 57A, the Modvat credit could not be denied. He pleaded no doubt the grease proof paper in question could be used a couple of times before it became scrap but that by itself would not be a reason for denying the benefit of Modvat credit. He pleaded that paper as such could not be considered as an appliance as held by the learned lower appellate authority in terms of the items excluded under Rule 57A. It is also not a condition precedent for grant of Modvat credit as held by the learned lower original authority that the inputs should be either contained in the finished product or should be used as an inprocess material for the manufacture of the goods. He cited the following case laws in support of his plea : 1989 (43) E.L.T. 598 1992 (61) E.L.T. 706 1991 (56) E.L.T. 757 1994 (69) E.L.T. 612 1994 (74) E.L.T. 322 1990 (49) E.L.T. 538 4. The learned DR relied on the ruling of this Bench in the case of C.C.E. v. Steel Authority of India Ltd. reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fy in this behalf, for the purpose of allowing credit of any duty of excise or the additional duty under Section 3 of the Customs Tariff Act, 1975 (51 of 1975), as may be specified in the said notification (hereinafter referred to as the specified duty ) paid on the goods used in or in relation to the manufacture of the said final products (hereinafter referred to as the inputs ) and for utilising the credit so allowed towards payment of duty of excise leviable on the final products, whether under the Act or under any other Act, as may be specified in the said notification, subject to the provisions of this section and the conditions and restrictions that may be specified in the notification : Provided that the Central Government may specify the goods or classes of goods in respect of which the credit of specified duty may be restricted. Explanation. For the purposes of this rule, inputs includes (a) inputs which are manufactured and used within the factory of pro- duction, in or in relation to, the manufacture of final products, and (b) paints and packaging materials but does not include (i) machines, machinery, plant, equipment, apparatus, tools or appliances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect that this view is not sustainable in view of the judgment of the Hon ble Supreme Court in the case of CCE v. Eastern Paper Industries Ltd. reported in 1989 (43) E.L.T. 202 (S.C.) and the Hon ble Supreme Court has held in that case that goods which are used till the goods are rendered fit for marketing can be taken to have been used in or in relation to the manufacture of a finished product. The words in or in relation to the manufacture fell for consideration before the Hon ble Supreme Court in the case of J.K.. Cotton Mills Co. Ltd. v. STO reported in A.I.R. 1965 SC 1310 (V.C. 213) and the Hon ble Supreme Court interpreting the words in the manufacture used in the context of Rule 18 framed under Section 13 of the Central Sales Tax Act, 1956 has held as under :- The goods referred to in clause (b) of sub-section (3) of Section 8, which a registered dealer may purchase shall be goods intended for use by him as raw materials, processing materials, machinery, plant equipment, tools, stores, spare parts, accessories, fuel or lubricants in the manufacture or processing of goods for sale or in mining or in the generation or distribution of electricity or any other fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of use of the BOPP films for the manufacture of laminate sheets has held after taking note of use of the material as under :- 7. Shri K. M. Mondal, the learned SDR, after explaining the process of manufacture and the use of the inputs in the said process indicated that the films do not form part of the final product and they only function as a separating medium between the two layers so that the two layers do not get stuck with each other, when they were subject to pressing under heat treatment. In view of this, these can be considered only as an appliance or apparatus. Though it is not disputed that these films are used in relation to the manufacture of the final product, these films being in the nature of appliance or apparatus, get excluded from the purview of the Modvat credit because of the explanation under Rule 57A. On the question of time-bar, he conceded that according to the decision of the Tribunal taken in regard to similar matters, the demand dated 16-6-1988 is wholly time-barred as per Section 11A of the Central Excises and Salt Act, 1944. Likewise the demand dated 25-2-1987 is partly time-barred and hence he is not arguing on merits since the issue has alr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unction. In the context of the scientific and technical meanings given in the recognised dictionary, the BOPP films which are nothing but films made of synthetic resins cannot be construed as either an apparatus or an equipment or an appliance. Even going by the normal understanding of the aforesaid terms, we are unable to be convinced that these films could be construed as apparatus, equipment or appliance. Moreover, seeing the samples produced of the films both before usage in lamination and after usage, we find that the film loses its identity completely and becomes akin to a translucent paper. Hence, we are convinced that these films get partly consumed in the process of manufacture of lamination sheets and lose their identity. They directly go in the process of lamination. Though, no doubt, they are retrieved and do not form part of the final product, they lose their identity. We do not subscribe to the view that for availing Modvat scheme the input should form part of the final product because Modvat scheme extends even to packing materials and the requirement is only that the inputs should be used in or in relation to the manufacture of the Final product. In view of these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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