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TMI Blog2000 (7) TMI 774X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue s appeals, the Revenue has challenged the grant of benefit given by the Commissioners. The Larger Bench of the Tribunal in the case of CCE, Meerut v. Modi Rubber Ltd. as reported in 2000 (119) E.L.T. 197 (T) in paras 14 15 of the order had discussed in great detail with regard to the grant of benefit of Modvat credit in respect of the item in question under Rule 56A. Paras 14 to 21 of the said order is reproduced hereinbelow :- 14. We have already noted the precise function of the lubricants as stated by ld. Consultant vide para (5) of this order. We agree with his submissions on the point. Unless the machinery of the assessees are lubricated with the lubricants, heat will be generated on account of mechanical friction between the working surfaces of the machinery leading to adverse consequences affecting the process of manufacture as rightly submitted by ld. Consultant. The friction and the resultant heat are also sure to cause damage to the machinery. These facts would suffice to hold that lubrication of the machines and machinery is essential for their working and, for that matter, for the smooth process of manufacture of final products. Ld. DR s plea that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ember held that the lubricants in question which (according to ld. Member) were used only for the better operation of the machinery fell outside the category of essential inputs and hence, did not qualify for Modvat credit under Rule 57A. Though ld. Member was right in his observation that lubricants and greases were not in the exclusion category, it was not correct to observe that Rule 57A did not define inputs . The definition of inputs is inbuilt in the rule as we have already observed. The finding of the Bench to the effect that the lubricants were used for better operation of the machinery was not only inapposite to the issue formulated by it but also was erroneous inasmuch as the said goods used for lubrication of the machinery were essential for manufacture of the finished products. The Bench sought to draw a line between essential inputs and non-essential ones and classified lubricants in the category of the latter. Such a drawing of line itself was not essential for deciding the issue. Hon ble Supreme Court has lucidly brought out the fallacy of drawing line of strict demarcation in para 9 of their judgment in the case of Collector of C. Ex. v. Ballarpur Industries Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue stands answered in favour of the assessees. Appeal Nos. E/1749/97-NB, E/1934/97-NB, E/2271/97-NB and E/779 to 790/99-NB(DB) of the Department are rejected. Appeal Nos. E/173/98-NB is allowed and the order impugned therein is set aside. 20. In appeal No. E/1579/97, we note, the original and first appellate authorities had disallowed the Modvat credit on lubricants on the further ground that the credit had been taken by the party on the strength of original copy of invoice without having satisfied the jurisdictional Assistant Commissioner that the duplicate for transporter copy of invoice had been lost. The Modvat credit had been taken in November 1995. The fact (as found by the lower authorities) that the appellants had not satisfied the A.C. of the loss of the duplicate copy of invoice before taking the credit is also not disputed. We find that a similar factual situation was considered by a 3-Member Larger Bench of this Tribunal in the case of C.C.E., New Delhi v. Avis Electronics Pvt. Ltd. Others [2000 (37) RLT 501] wherein the Bench, in respect of periods subsequent to 20-5-94, held thus When a particular thing is directed to be performed in a manner prescribed by R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endered in the case of Jawahar Mills as reported in 1999 (108) E.L.T. 47. Therefore, the issue being covered, the Revenue s claim is rejected. There is also a challenge by the Revenue in the same appeal pertaining to the grant of Modvat credit in respect of the item known as Roll Tyre Secondary Crusher and C.I. Slag Box. The Commissioner on CI Slag Box has noted that in terms of the admitted position, molten metal from furnace is poured into the slag box after tapping in the furnace and the molton metal is changed into CI moulds. Therefore, the Commissioner (Appeals) held undoubtedly that CI Slag Box are used in the process of manufacture of the final product and hence used for processing in the manufacture of final products. He, therefore, concluded that they are eligible for Modvat credit under Rule 57Q since they are in the nature of apparatus/accessories fully covered under definition of capital goods given in Explanation to Rule 57Q. 4. This is challenged by the Revenue on the ground that it is not included in the definition as appearing in the relevant rules. 5. The assessee in counter, has relied on the decision of Leader Engineering Works as reported in 1996 (83) E.L.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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