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TMI Blog2024 (3) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... nly for the purposes of Notes 1 to 4, Section XVI that the word 'machine' (used in Notes) refers to any machine, machinery, plant, equipment, apparatus or appliance mentioned in the heading of Chapter 84 or 85. Otherwise, the whole phrase machine, machinery, plant, equipment, apparatus, etc. would have to be used wherever the word machine is used in the Notes. As carbon electrode is essential for manufacture of aluminum, it should be eligible for Modvat credit, as it would satisfy the criterion of input. Also, the issue whether electrodes can be treated as input for availment of CENVAT Credit or capital goods came before the Tribunal in the case of THE COMMISSIONER OF GST CENTRAL EXCISE VERSUS M/S. CHEMFAB ALKALIES LTD. [ 2023 (7) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Service Tax paid on input services, and utilized the same for payment of duty on their final product. In order to manufacture Aluminium, the appellant requires various inputs, which are procured from time to time. During the relevant period i.e., February 2007 to January 2012, the appellant procured various materials for consumption in the process of manufacture of Aluminium, namely: - i. Pre-baked Anode ii. Cathode Carbon Block iii. Ceramic Fibre Blanket Cera iv. Aluminium Pipes and Tubes v. Ceramic Foam Filter Plate vi. Feed Tip Board (without paper coating case) vii. Fiberfrax Cervac Board viii. CF Paper DS ix. Silicon Carbide Block (IMP) and the appellant availed CENVAT Credit on such consumable materials at the time of receipt since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Silicon Carbide Block (IMP) and C.F. Paper DS, alleging that the said goods are also capital goods. 4. The appellant contested the Show Cause Notices and submitted that the electrodes that are used in the electrolytic processes are input . It was also contended that the electrodes fulfilled all the criteria mentioned in the definition of input and therefore, the same indeed qualifies as an input within the meaning of Rule 2(k) of the CENVAT Credit Rules, 2004. 4.1 Without prejudice, it was submitted that there is no provision in the Rules to disallow 50% of credit on electrodes since even if the same are classified as capital goods , still the remaining 50% of the credit would be eligible in the subsequent year. 5. The adjudicating authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We find that the Circular No. B22/51/86-TRU dated 21.10.1986 clarified the position that: - 3. As regards carbon electrodes used in the manufacture of aluminium, Modvat credit appears to have been denied on the ground that graphite electrodes are to be treated as machines since they fall under Chapter 85 and all goods under Chapters 84 or 85 should be treated as machines in view of Section XVI Note 5 which reads as under:- For the purposes of these notes, the expression 'machine' means any machine, machinery, plant, equipment, apparatus or appliance cited in the heading of Chapter 84 or 85. 4. This contention does not appear to be correct. It is only for the purposes of Notes 1 to 4, Section XVI that the word 'machine' (used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consumed in the manufacture of caustic soda is an input as defined under erstwhile Rule 57A of Central Excise Rules, 1944 and eligible for modvat credit. The revision application filed by the department against this decision of the Tribunal was dismissed by the Tribunal vide Final Order No.170/1995 and the order has been accepted by the Department. Similarly, reference application was filed in the case of CCE Vs Modi Alkalies Chemicals Ltd. - 1994 (74) ELT 966 (Tri.) and in the case of CCE Vs Kanoria Chemicals Industries (supra). The appeals filed by the department against such decisions were also dismissed. In the case of Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. - 1988 (35) ELT 227 (T) it was categorically held that electrodes takes part i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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