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TMI Blog1999 (12) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... s term under Rule 57A of the Central Excise Rules. The party contested the proposed action of the department, by explaining the process of manufacture of their products and the role of the input, namely, TEG in such process of manufacture. The dispute was adjudicated by the jurisdictional Assistant Commissioner of Central Excise, who disallowed the entire credit taken by the party. The adjudicating authority relied on the decision of the Tribunal in the case of Ester Industries Ltd. v. C.C.E., Meerut reported in 1997 (90) E.L.T. 391 (T), wherein a Two-Member Bench of the Tribunal had denied Modvat credit on TEG used for cleaning filters which were parts of the machinery in the manufacturer's factory. The order of adjudication was upheld by the Commissioner of Central Excise (Appeals), in the appeals filed by the aggrieved party. The present appeals are against the common order passed by Commissioner (Appeals) in the separate appeals filed before him by the party against the separate orders of adjudication of the Assistant Commissioner. 2. I have carefully examined the orders of both the lower authorities and connected records of the case. I observe that the appellants had ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri Bipin Garg for the appellants and learned JDR Shri Y.R. Kilania for the respondent-Revenue. The learned Advocate, reiterating the grounds of the present appeals, has submitted that the order of the learned Commissioner (Appeals) is liable to be set aside on numerous grounds. The grounds highlighted by the learned Advocate can be summarised as follows :- (i) Both the lower authorities, while holding that TEG was rather used to clean filters, ignored the fact that such cleaning of filters was indispensable for the manufacture of the final products and that the manufacturing process would come to a grinding halt if the filters not so cleaned using TEG. Thus, TEG was used indirectly in the manufacture of the final products. The expression "used in or in relation to the manufacture of the said final products whether directly or indirectly and whether contained in the final product or not" in Rule 57A(1) of the Central Excise Rules was over-looked by both the lower authorities. (ii) Though the Assistant Commissioner made mention of the decision of the Tribunal in the case of J.K. Synthetics (supra) in his order, he did not consider the ratio of the said decision at all. The lower ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of the material in question, namely, Triethylene Glycol used by them in the manufacturing process on the ground that the use of the same is only for maintenance of machinery through which the polymer passes. It has been held that Triethylene Glycol is more specifically used as a part of cleaning equipment than as an input the actual manufacture of the final product. This view is plainly incorrect and does not take note of the fact that the eligibility criterion for availment of Modvat is that the material should be used in the manufacture of the final product or in relation to the manufacture of the final product. While holding that Triethylene Glycol is more specifically used as a part of cleaning equipment than as an input in the actual manufacture of the final product, the criterion of use in relation to the manufacture has not been properly considered. The actual scope of the said expression came up for decision before the Larger Bench of the Tribunal in Shri Ramakrishna Steel Industries Ltd. v. Collector of Central Excise, Madras [1996 (82) E.L.T. 575]. The relevant observations of the Bench are extracted below :- "We are here dealing with a case where inputs are not nec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the assessee on Triethylene Glycol." 5. Nevertheless the fact is that the ratio of the decision of the Two-Member Bench of the Tribunal in the case of Ester Industries (supra) was not discussed, considered or followed by the learned Single Member while passing the final order ibid and that the decision of the Two-Member Bench in the case of Ester Industries (supra) was on the question whether TEG could be accepted as an input used in the manufacture of the final products by the assessees, which is clearly brought out from para 5 of the order of the Two Member Bench which is extracted below :- "5. Heard both sides. In this case short question is whether the TEG is used in or in relation to the manufacture of final product as provided under the Rule 57A of the CE Rules, 1944. Admittedly the TEG is used for cleaning the filters installed in the plant which are used for filtering the liquid polymer for manufacture of final product. Hence it is used for maintaining of the filters only. Therefore it cannot be said to be used in the process of manufacture of final product i.e. Polyester chips." 6. It, however, appears that the question whether TEG was used in rela ..... X X X X Extracts X X X X X X X X Extracts X X X X
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