9911796707
TMI Blog1996 (4) TMI 279X X X X Extracts X X X X X X X X Extracts X X X X ..... Modvat credit on Hydrochloric Acid and Caustic Soda which were claimed by them to be inputs for their final product, Carbon Black. The Commissioner has stated in his impugned order that the show cause notice proposed disallowance of credit on the two items in question on two grounds :- (1) These are not the inputs for their final product, Carbon Black but for steam, an intermediate product. (2) They had submitted wrong and insufficient declaration under Rule 57G. He has observed that in the declaration filed by them, the appellants had declared Carbon Black as the final product but had left the Column intermediate products blank. Against the disputed items caustic soda and Hydrochloric [Acid] under the column Nature of inputs the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r claim being covered in their favour by the decisions cited by him. 3. The learned Departmental Representative, Shri D.S. Malik rebutted the arguments and supported the impugned order. 4. I have noted the submissions. I have perused the record. The Commissioner had held that the first ground raised in the show cause was not sustainable. That ground was that the two chemicals in question are not the inputs of their final product, carbon black but are inputs of steam, an intermediate product. He held that this ground was not sustainable because if steam is an intermediate product in the manufacture of carbon black and these chemicals are inputs of steam, a fact accepted in the notice, the credit on these two inputs cannot be denied for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the submissions and perused the record. I find that the Collector (Appeals) has held that caustic soda and hydrochloric acid are admittedly used for maintenance of plant and machinery and hence cannot be called inputs within the definition of Rule 57A of Central Excise Rules, 1944. He has then observed that the inputs used in the maintenance of plant and machinery have specifically been excluded from the definition of inputs as per Rule 57A and hence the appellants were not entitled to avail Modvat credit on such inputs. He has then proceeded to observe that these inputs are not directly consumed for manufacture of finished goods and that these are also not used in or in relation to the manufacture of finished goods but only for maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he scope of the expression in relation to the manufacture of final product came up for decision recently before the Larger Bench of the Tribunal in Shri Ramakrishna Steel Industries Limited v. Collector of Central Excise, Madras - 1996 (82) E.L.T. 575 (Tribunal). The relevant observations in this regard in the said decision are as follows :- 14. we are here dealing with a case where inputs are not necessarily required to be used in the manufacture of final product, but are used in relation to the manufacture" of the final product, which is an expression of considerably larger import. The words in relation to the manufacture are intended to set at rest all doubts. Where raw material is actually used in the main stream of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... high pressure steam. (2) Quenching the heated carbon black powder in the quench tower. (3) Pelletising carbon black powder into pellet form. (4) As a heating medium for heating carbon black feed stock. The production of steam by boiling demineralised water in the boiler is thus part of the process of manufacture of carbon black. The use of demineralised water in such boiling is commercially expedient to ensure boiler safety and proper heating process. By not treating the water and removing the dissolved impurities and minerals, the process will become commercially inexpedient. The use of Caustic Soda and Hydrochloric Acid in the demineralisation plant is thus connected with the process of manufacture of carbon black and cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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