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TMI Blog2007 (7) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... ication 67/95 as well as denial of Modvat credit. 2. The appellants have used steel products manufactured by them such as hot rolled sheets, plates etc. for the manufacture of goods like bottom plates, splash plates and some other items which are used in or in relation to manufacture of finished goods, which are dutiable. The intermediate goods like bottom plates, splash plates etc. are eligible for exemption and have been granted exemption and hence there is no dispute about the same. However, since these goods have been exempted, the Department has denied the exemption to the hot rolled sheets, plates etc. used in the manufacture of such exempted goods. The appellants are claiming exemption in respect of such impugned goods under Notification 67/95 on the ground that the exempted goods being intermediate goods, the proviso under the said Notification has no applicability since the finished goods are dutiable. 3. In some of the cases, the appellants are using iron and steel products produced by them for manufacture of castings. These castings are meant for manufacture of machine parts which are used for replacement of worn out parts of machineries which are used for produc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erse. 8. In some of the cases, the credit has been denied because the items in question were not declared for the purposes of availing Modvat credit. 9. In some of the cases, various amounts of credits have been denied for the reason that the appellants have not complied with the rules and/or have not produced the necessary documentary evidence. 10. The ld. Advocate for the appellants has cited the following decisions in support of the appellants' claim for exemption under Notification 67/95 and claim for entitlement to Modvat credit in respect of the impugned goods involved in these appeals: (i) Collector of Central Excise, New Delhi v. Hindustan Sanitaryware Industries - 2002 (145) E.L.T. 3 (S. C.) : In this case, the Hon'ble Supreme Court has allowed exemption to plaster of paris used in making of moulds which are in turn used as inputs in relation to manufacture of sanitaryware (final product); (ii) Escorts Ltd. v. Commissioner of Central Excise, Delhi - 2004 (171) E.L.T. 145 (S.C.) : In this case, the Hon'ble Supreme Court has held that the purpose of Central Excise Rules Cenvat Rules is to streamline payment of duty and to prevent cascading effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Plant v. Commissioner of Central Excise, Raipur - 2003 (159) E.L.T. 553 (Tri.-LB), under which the welding electrodes and gases used for repair and maintenance of the plant and machinery have been held to be not used co-extensively with the process of manufacture of final product and hence not integrally connected with the manufacture. Consequently, the Larger Bench has held that such gases and welding electrode cannot be considered to have been used for the manufacture of final product and hence these have been held not eligible for input duty credit. 13. After hearing both sides extensively on the issues involved in these appeals, we are of the view that since the decision of the Larger Bench in the case of Jaypee Rewa Plant (cited above) has not been appealed against or reversed, the impugned goods namely, welding electrodes, formatic flux, welding alloys, welding flux, welding wires etc. and gases which are used for repair and maintenance of machinery cannot be allowed Modvat credit. However, the ld. Advocate for the appellants states that in some of the cases, the appellants have used oxygen and acetylene gas for actual cutting of slabs etc. and such use is differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 57Q, we are of the view that the appellants are entitled to exemption on the inputs under the Notification 67/95 when produced within the factory and they are entitled to Modvat credit when such inputs are procured on payment of duty from outside. In this regard, we note that the decision of the Hon'ble Supreme Court in the case of Hindustan Sanitaryware (cited supra) allowed exemption to plaster of paris used for making of moulds which were used in turn in relation to the dutiable sanitaryware. We also find that the said decision has been followed by the Tribunal in several other cases noted above. The machine parts manufactured by the appellants within the factory either out of the inputs manufactured by them or procured by them from outside are on the same footing as the moulds made from plaster of paris in the case of Hindustan Sanitaryware and hence the ratio of the said decision of the Hon'ble Supreme Court would permit exemption to the impugned inputs manufactured and used by the appellants under Notification 67/95 and would permit credit under the Modvat Rules when brought from out side. 17. In some of the appeals, credit has been denied on items, such as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, in respect of such denial of credit, we find that the same are in accordance with law and no contrary submissions have been made before us requiring interference with such denial. Hence denial of credit on such miscellaneous grounds (except held otherwise in respect of the issues specifically discussed by us in the foregoing paragraphs) is confirmed. 21. In view of our findings and determination as above, the impugned orders to the extent of denying the credit on welding electrodes, gases, flux etc. used in welding, repair and maintenance etc. are confirmed and the impugned orders denying credit on inputs used for the manufacture of intermediate machine parts are set aside. The impugned orders denying exemption under Notification 67/95 to the inputs manufactured and used in the intermediate machine parts are set aside. The impugned orders denying credit to sulphuric acid, refractories, lubricating oil, graphite electrodes, etc. are set aside. The credit on paints and varnishes are allowed with effect from 1-3-97 and denied for the period prior to that date. As regards oxygen and acetylene gases used in the manufacture of dutiable finished goods (excluding these used in weld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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