9911796707
TMI Blog1996 (7) TMI 380X X X X Extracts X X X X X X X X Extracts X X X X ..... s on which they have claimed the credit as they are used in or in relation to manufacture of their final product paper. The description of the inputs in question, their function in the process of manufacture and the ground on which the lower authorities had not considered them as eligible inputs for Modvat credit, are given in the tabular columns below :- Sl.No. Description Uses and function Reasons given by Lower authorities 1. Sulphuric Acid For demineralisation and processing of water so as to make it fit for use for generating steam which is then used for generation of electricity for running the plant. There are also other uses about which there is no dispute. Chemicals used for puri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... city for running the plant. These are used for treatment of water to prevent the deposit of salts and for removing unwanted elements from raw water and thus for maintenance of boiler. 10. Hydrazine Hydrate For purification of water by reacting with oxygen and converting it into water inside the deareator system. The steam generated by using this water is then used for cooking of bamboo/ hardwood chips, drying of paper and generation of electricity for running the plant. These are used for treatment of water to prevent the deposit of salts and for removing unwanted elements from raw water and thus for maintenance of boiler. 11. Ion Exchange Resins For treatment of boiler water to make it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for uniform formation of paper. -do- 17. Summer Dead KNIVES, KMW Dead Knives These are parts of wood/bamboo cutting machine. Bamboo/wood are the main raw materials for manufacture of paper and paper board. Before being put in the digester, these are required to be cut into smaller pieces and this job is done in cutting machine. The cutting machine has got a disc and fly knives are fitted as per requirement onto the said disc. Dead Knives are fitted at the stationery portions of cutting machine as per requirements. These knives require frequent replacement. -do- 18. Cutter Knives These are parts of paper cutting machines. These are fitted into the said machines and require frequent rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come up before the Tribunal who had held in favour of the appellant and had rejected the department s appeal. This order of the Tribunal had been ultimately confirmed by the Supreme Court in its order dated 9-3-1987 in Civil Appeal No. 2101 (NM) of 1986. Therefore, so far as these chemicals at S. Nos. 1-11 are concerned, their use in paper making is a technological necessity as shown by the textual authorities and their status as an input in the manufacture of paper has also been recognised in the judicial decisions of the Tribunal as upheld by the Supreme Court. The ld. counsel further submitted that the inputs at S. Nos. 14, 15 and 16 are felts and synthetic fabrics, special link dryer fabric, dandy cover etc. specifically covered by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ause under that Rule on being applied to the inputs with which we are concerned, in this appeal would lead to the conclusion that the water purifying chemicals would be eligible for Modvat credit since they would fall within the category of inputs used in relation to the manufacture of the final product. Some of the inputs like felts wire cloth dandy cover are specifically covered by the Larger Bench decision. Similarly the inputs which perform their functions only on being fitted on machines used in the manufacture of paper being parts thereof would also be so eligible for Modvat credit. However, in the case of two of the inputs at S. Nos. 12 and 13 of the table, we find that these are in the nature of organic surface active agents used fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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