ORDER
M.P. Bohra, Membr (T)
1. Heard Shri J.R. Madhiam, ld. JDR for the Appellants-Revenue and Shri P.K. Das, ld. Advocate for the respondents.
2. Shri Madhiam submits that the inputs used during the process are for retaining heat of the molten metal contained in the tundish and cannot be treated as input in or in relation to the manufacture of final product as per Explanation below Rule 57A. Therefore, the modvat credit taken on Garnex with Impad, Tundak, Gavapack, Garseal etc. is not admissible. He, therefore, submits that the appeal may kindly be allowed and the Order-in-Original may kindly be resorted.
3. Ld. Advocate, Shri Das submits that the matter has been examined by the Hon’ble Supreme Court in the case of Singh Alloys & Steel Ltd. v. Assistant Collector of Central Excise and by the Larger Bench decision of the Tribunal in the case of Collector of Central Excise, Chandigarh v. A.B. Tools Ltd. wherein it has been held that Ramming Mass used in relation to manufacture of steel ingots to be considered as input and eligible for modvat credit–Explanation to Rule 57A of Central Excise Rules, 1944. He submits that similar view was expressed by the Hon’ble Member (Technical), Shri V.K. Agrawal, in the case of Commissioner of Central Excise, Chandigarh-I v. Ashoka Alloys Steels (P) Ltd. reported in 2004 (60) RLT 173 (CESTAT-Del.). He, therefore, submits that the appeals may kindly be rejected.
4. In the case of Singh Alloys & Steel Ltd. referred to above, the Hon’ble Apex Court has held as under:
Modvat Credit – Dolopatch mix, magnesite peas and ramming mass used in relation to manufacture of steel are eligible for credit–Explanation to Rule 57A of Central Excise Rules, 1944. – These items certainly do not come within the dictionary meaning of machines or machinery or instruments or appliances. The items are chemicals and have been classified as such in the Tariff Act. Merely because chemicals are used for the machinery do not make the chemicals, machinery. It does not matter that the items are used in the Machinery or for the purpose of the Machinery. To repeat, the only relevant question is, are they used in or in relation to the manufacture of ingots. The Tribunal has erred in seeking to limit the meaning of the word ‘inputs’ to those items which go into the steel ingot completely overlooking the phase ‘in relation to’ in the definition in the major clause of the explanation.
The Tribunal in the Larger Bench decision in the case of Collector of Central Excise, Chandigarh v. A.B Tools Ltd. referred (supra), has held that the modvat credit is admissible on the ramming mass used in relation to manufacture of steel ingots to be considered as input and eligible for modvat credit–Explanation to Rule 57A of Central Excise Rules, 1944. Keeping in view the use of these items and the clarifications given by the Hon’ble Supreme Court and CESTAT in several cases regarding expression in relation to the manufacture, it is clear that the goods are eligible for modvat credit. I do not find force in the Departmental appeals and consequently, I set aside the impugned order and dismiss all the appeals filed by the Revenue.
(Pronounced in the open Court).