1991 (6) TMI 173

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..... per : V.P. Gulati, Member (T)]. - This reference application arises out of the order of the Tribunal bearing No. 421/88, dated 27-7-1988. The Tribunal in their order have rejected the applicants plea for Modvat credit in respect of ramming mass, mortar and Carnex boards used for lining for the furnace and the ladles. The applicants are manufacturers of steel products and their plea was that ramm .....

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..... tion to the manufacture of the final products. 3. The learned DR for the Department pleaded that the Tribunal has appreciated the facts of the use of the items and had come to the conclusion based the same. Therefore, no question of law can be stated to arise out of the findings of the Tribunal. 4. We observe that the Tribunal, in their order has made a distinction between the material .....

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..... se by themselves do not participate in the process which are carried out in processing the materials which ultimately lead to the manufacture of paper. We observe that while allowing Modvat credit regard will have to be had to the purpose of the scheme i.e. to reduce cascading effect of the duty on the finished product by way of relief on the duty paid in respect of the goods which are used in or .....

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..... sed in the factory in which the goods are produced would not have to be allowed the benefit of the input duty relief under the Modvat Scheme. Going by the ratio of the judgment of the Hon'ble Supreme Court cited supra, it has to be concluded that the credit has to be allowed only in respect of such of those inputs which are used in the process of manufacture and which go directly into the manufact .....

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..... to be taken not to have been used in or in relation to the manufacture of the finished product but have to be considered for making the machinery and the implements etc. functional. The inputs in the present case are of such nature. In the above view of the matter, we, therefore, hold that no point of law arises for reference in this case and the reference application is rejected.
Case laws, .....

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