9911796707
TMI Blog2001 (12) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... sp; C.J. Kits (iv) Collapsible corrugated M.S. Reels and Wire Nails (v) Self-Adhesive PVC Label (vi) M.S. Round (vii) Graphite Rod (viii) Woven sacks (ix) Alfloe 520 and Nalcoal-2000 (x) Sapcolube 1710B 2. We heard Shri P.C. Jain, learned Advocate for the appellants, and Shri M.M. Dubey, learned Departmental Representative for the Revenue. The submissions made by both the sides and our findings thereon are as under : 3.1 The learned Advocate submitted that normally, their final products cables are wound on wooden drums; that due to increasing shortage of wood and keeping in view safe transportation of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of Central Excise duty; that, however, the goods were received back under the provisions of Rule 173H of the Central Excise Rules and thereafter goods were sold by these two firms to the appellants; that they had produced the invoices relating to the initial sales made by M/s. Super Film and Usha Martin, D-3 intimation given by those units under Rule 173H and invoices, under which goods were received by the appellants, having reference to the said D-3 intimations; that accordingly credit is not deniable to them. The learned Departmental Representative has, however, mentioned that the appellants had not produced the original invoices under which the goods were initially cleared and Central Excise duty was paid. 4.2 We observe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the finding as contained in the impugned order to the effect that C.J. Kits are used for jointing the cables at the time of their laying and not for jointing them when wound on the drumps before the clearance and as such, Modvat credit is not allowable. 5.2 We find that the dispute in respect of these products relate to their use which is a verifiable fact. If the uses of "XEC Caps" and "C.J. Kits" are as mentioned by the learned Advocate, Modvat credit of the duty paid is admissible to the appellants as these are used in the manufacture of the final product i.e. Cables. If these items are used for jointing the cables at the time of their laying, certainly these cannot be treated as inputs, which are used in or in relation to the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sory process which has to be carried out before the cables are tested and despatched; that further these labels remain wrapped around the cables even after despatch and as such are inputs used in the manufacture of the final product. We agree with the submissions of the learned Advocate. The Revenue has not controverted the contentions of the appellants that the labels are used in relation to the final product and remain wrapped around the same even at the time of removal. It has been held by the Calcutta High Court in the case of Singh Alloys & Steels Ltd. v. Assistant Collector - 1993 (66) E.L.T. 594 (Cal.) that "the definition of inputs is not dependant upon what ought to be used but what is in fact used." It was also observed by the Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts as these are used for packing of PVC compound. We, therefore, disallow the Modvat credit in respect of woven sacks. 10.1 The learned Advocate mentioned that chemicals namely Alfloe 520 and Nalcool-2000 are used in the fresh water circuit on the diesel engine of the DG set, used for running the cable manufacturing machine and are, therefore, inputs used in relation to manufacture of the final product. He relied upon the decision in Singh Alloys Steel Ltd., supra, wherein the Calcutta High Court has held that "merely because chemicals are used for the machinery does not make the chemicals machinery. It does not matter that the items are used in the machinery or for the purpose of the machinery." Admittedly, these chemicals are used s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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