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TMI Blog2005 (10) TMI 147X X X X Extracts X X X X X X X X Extracts X X X X ..... n the inputs oxygen and nitrogen fraudulently during the period from 1-11-1998 to 7-8-1999. The brief facts are that the plant was shut down due to technical problems. Normally, oxygen and nitrogen are used as inputs in the manufacture of pig iron in the Corex furnace. Even when the plant was shut down, the appellants were receiving oxygen and nitrogen through pipeline from M/s. Jindal Praxair Oxygen Company Limited, the manufacturer of the said inputs and availed Modvat credit on the same. The contention of the appellants was that some hot metal got solidified and stuck in the Corex furnace and it was a technological necessity that the same had to be removed before restarting the furnace. For that purpose, oxygen and nitrogen had to be use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrogen were not used in or in relation to the manufacture of the final product is not correct on facts. (v) Where any process is integrally connect with the ultimate production of goods that process falls within the express "in the manufacture of goods", has held by the Apex Court in the case of J. K. Cotton Spg & Wvg Mills Co. Ltd. reported in 1997 (91) E.L.T. 34 (SC). (vi) In the case of Ellora Steels Ltd. v. CCE reported in 1995 (78) E.L.T. 294 (T), the oxygen gas used in electric furnace is a direct input used in the manufacture of steel castings. (vii) The Appellants submit that after activation of the solidified material by using oxygen and nitrogen instead of pig iron emerging if it were assumed that the resultant products became ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itrogen used by the appellants for reactivating the Corex furnace is entitted for Modvat credit. Revenue is not inclined to allow Modvat on the ground that the inputs were used during the shut down period and there was no manufacture. It has also been held that the inputs were not used in relation to manufacture of final products. The fact that solidified material clogged the furnace is not in dispute. The appellants used oxygen and nitrogen for removing the solidified material. In fact, the solidified material was melted by the use of inputs and according to the appellants the resultant product was also pig iron. In that case, we cannot say that the inputs were not used in relation to the manufacture of final products. Even if it is assume ..... X X X X Extracts X X X X X X X X Extracts X X X X
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