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TMI Blog2001 (9) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... Castings which they get machined from their job workers. These machined castings in turn are used in the production of both types of P.D. Pumps. The appellants are also availing Modvat credit on the inputs viz., Pig Iron under Rule 57A of the Central Excise Rules, 1944. The present dispute relates to the Modvat credit availed on the input material viz., pig iron used in the exempted variety of the P.D. Pumps. In the declaration filed by the party under Rule 57G, they have declared the ferrous waste and scrap as a final product. Such waste and scrap emerges during the manufacturing process of the machine castings. The party cleared the ferrous waste and scrap on payment of duty and took credit in respect of the pig iron contained in such was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontained in such waste and scrap is eligible for credit is not correct as such waste and scrap emerges in the course of manufacture of the final product and are not the final products in themselves. He also observed that the provisions of Rule 57D are not attracted, as it is not a case wherein the intermediate goods are exempted from payment of Central Excise duty. 4. This is the second stage appeal of the party. I have heard Shri R.G. Sheth, Advocate for the appellants and Shri A.S. Bedi, SDR for the respondent. The ld. Counsel for the appellants has reiterated the submissions which have already been duly considered and rejected by the original as well as the lower appellate authority in their respective orders. The ld. Counsel submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inished product and is being subject to payment of duty as per the rates prescribed under the Tariff, the input material is also used in the manufacture of such waste and scrap. It is argued that such being the facts, all the terms of the provisions of Rules 57A and 57G are satisfied and there is no warrant to deny them the Modvat credit proportionate to the quantity of duty of excise paid on the pig iron used in the manufacture of such waste and scrap. The basic flaw in this contention is that nobody would intend to manufacture waste and scrap as a final product and use the input material in the manufacture of such final product. The fact is that whole of the quantity of pig iron is used in the manufacture of exempted category of P.D. Pump ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the final product. Once the duty paid input is physically involved in the manufacturing process, that can be said to have been used despite the fact that the same is not fully assimilated in the final product. Hundred per cent absorption or assimilation of the duty paid input in the final product is not a sine qua non of Modvat credit, but to take benefit of Modvat Scheme, the petitioner is required simply to establish that the input was used in the manufacture of final product. The sulphuric acid (duty paid input) can be said to have been used by the petitioner in the manufacture of final product when the entire relevant quantity thereof was applied or subjected to the manufacturing process. 6. The High Court in arriving at the above c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments of the Supreme Court and the Allahabad High Court are applicable with the same force to the facts of the present case. It is therefore to be held that the entire quantity of pig iron is used in the manufacture of the exempted category of the P.D. Pumps and no quantity of the input is used in the manufacture of waste and scrap. In view of the provisions of Rule 57C, the Modvat credit is not available to the appellants. Since in this case, I have relied on the ratio of the decision of the Hon ble Supreme Court and that of the Allahabad High Court, specifically on the subject, there is no warrant to consider the other decisions cited before me by the appellants. 9. The appeal thus fails and the same is rejected accordingly. - - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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