9911796707
TMI Blog1996 (9) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... these two items cannot be considered as inputs within the scope of the said term as per explanation to Rule 57A of Central Excise Rules. The Tribunal after careful consideration of the submissions and after examining the material on record and noticing the uses to which these two items were employed, held in para 10 of the final order as follows : 10. As can be seen from the above write up both the items are utilised as a corrosion inhibitor in cooling water system and in steam generation system. It is also an admitted fact that these inputs help in prevention of corrosion of the machinery. They are not used in the manufacture of the synthetic rubber as an ingredients or as an input. Therefore, the finding arrived at by the ld. Collector had both the items are not used in or in relation for the manufacture of the final product" is sustainable and requires to be confirmed. As regards the citations referred to by the Ld. Advocate it is seen that the inputs which has been discussed in those citations are being utilised directly in or in relation to the manufacture of the final product . In the present case, the items do not help in the generation of the steam nor in the maintaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Central Excise 1991 (55) E.L.T. 415 (Tribunal) = 1991 (36) E.C.R. 590 (ii) Straw Products Ltd. v. Collector of Central Excise 1992 (59) E.L.T. 572 (iii) Kapran Ltd. v. Collector of Central Excise 1993 (67) E.L.T. 377 (iv) Collector of Central Excise v. Asian Cables Ltd. 1996 (81) E.L.T. 509. 2. Arguing for the appellants, the ld. Advocate submitted that where there is a conflict between the two judgments of the Tribunal then a question of law arises requiring reference to the High Court. It is also his contention that the items used are essential as a technological necessity for the manufacture of final product and hence non-grant of Modvat would be questions of law requiring reference to the High Court. It is also his contention that the items used are essential as a technological necessity for the manufacture of final product and hence non-grant of Modvat would be a questions of law requiring reference to the High Court. He also referred to the judgment rendered in the case of Shri Ramakrishna Steel Industries Ltd. v. Collector of Central Excise, Madras as reported in 1996 (82) E.L.T. 575 wherein sand moulds were granted to the benefit of Modvat even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reaction for manufacture of synthetic rubber. It is their contention that the item inhibits corrosion by forming a non-volatile film on the surface of the metal which comes in contact with steam/steam condensate. Steam generated is used in all the process plants in the manufacture of finished product synthetic rubber. The Tribunal examined the facts that the items were only used as a coolant and as a corrosion inhibitor in cooling water system in the steam generation system. The steam is used for the manufacture of the synthetic rubber. However, steam is not dutiable and there is no claim for Modvat for steam also. The Tribunal has examined the explanation to Rule 57A which defines input to include - (a) inputs which are manufactured and used within the factory or product or in relation to the manufacture of final product, and (b) Paints and packaging materials but does not include - (i) machine/machinery plant, equipment, apparatus, tool or appliances used for producing or processing of any goods or bringing about any change in any substance in or in relation to the manufacture of the final products, (ii) packaging materials in respect of which any exemption to the exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thout use of this material, it would not be possible to viably indicating the manufacture of yarn. This judgment is clearly distinguishable. The Tribunal clearly found the item not being used for maintaining the machine but it was required to be used definitely `in or in relation to manufacture of the final product . Therefore, this judgment is clearly distinguishable. In the case of Shri Ramakrishna Steel Industries Ltd. (supra), the larger Bench of the Tribunal noticed that sand moulds had played a significant role in the manufacture of the final product. It was also found that chemicals or resin which are used in the sand mixture for the purpose of producing sand moulds are used in relation to manufacture of final product namely steel castings. This case is also distinguishable, as it was found that sand mould were very necessary to create a core for the purpose of pouring molten metal. The Tribunal on facts found that the sand mould was essential for manufacture of the final product steel castings. Hence it granted the benefit of Modvat. In the present case the item was used as corrosion inhibitor in the machinery. It is used for the purpose of maintenance of machinery and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 989 (43) E.L.T. 201 (SC), the Hon ble Supreme Court held that the wrapping paper being raw material and component part of wrapped paper is entitled for the benefit of the Notification No. 18A/83-C.E. It was also noted that the wrapping paper used in the wrapping of paper, it is to be treated as raw material or component part or other variety of paper which is wrapped. It was held that wrapping paper so consumed or utilised would be entitled for the benefit. The Hon ble Supreme Court further held that anything which enters into and form part of manufacturing process or required to make the article marketable, must be deemed to be a raw material or component part of the end product and must be deemed to have been used in completion of manufacture of the end product. In the light this Hon ble Supreme Court judgment, larger bench rendered in the case of Shri Ramakrishna Steel Industries Ltd., therefore, the appellants do not qualify for the benefit of the Modvat. The issue is also a fully settled issue, hence it cannot be referred to the High Court. In the case of Continental Exporters v. Collector of Customs as reported in 1985 (22) E.L.T. 259 (Tribunal), the Tribunal held that a re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
