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TMI Blog2000 (1) TMI 426X X X X Extracts X X X X X X X X Extracts X X X X ..... tory is not an input. In the order impugned in appeal E/487/91, the Collector (Appeals) has found that the hydrogen was used to isolate the nitrogen present in the atmosphere, by reacting with the oxygen in the atmosphere leaving behind nitrogen. This nitrogen after liquefaction is used as a coolant to regulate the temperature in the vessel in which the chemical reactions leading to emergence of sodium and chloromethane take place. The Collector's reasoning that nitrogen is an essential element for the manufacture of the final product by the respondent and since the nitrogen cannot be manufactured by the respondent without using the hydrogen the latter is input for the manufacture of final product is challenged in these appeals on the groun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e outlined earlier. 5. It now settled by the decision of this Tribunal in Union Carbide India Ltd. v. CCE - 1996 (86) E.L.T. 613 that any item which is used in or in relation to the manufacture of the final product as an input, credit of the duty paid on such input is permissible for payment of duty on the final product unless it falls within the scope of the explanation in Rule 57A, or any of the rules prohibiting taking of such credit. In the technology employed by the respondent for producing nitrogen, the use of hydrogen is essential. Nitrogen used by the respondent is in relation to the manufacture of the final product. It does not fall within excluded category, plant, machine, machinery, apparatus and appliances, equipment or tools ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing of that kind. The composition is slightly different with regard to the mercury cathode. Though the respondent stated that it is a liquid and therefore cannot be a machine, he could not explain how in that situation it could be used as a cathode without being mixed up in the solution for the electrolysis in which it is used. The fact that it may take part of the electrolysis process by itself does not render it not part of a machine. It appears to us on the basis of the arguments advanced by both sides that mercury cathode is in the nature of machinery part; however, the excluded inputs in Rule 57A does not include part of machine, as have been held by the Tribunal in Union Carbide India Ltd. v. CCE. Credit therefore could not be denied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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