JUDGMENT
P.S. Bajaj, Member (J)
1. In this appeal, the Revenue has questioned the validity of the impugned order-in-appeal vide which the Commissioner (Appeals) has reversed the order-in-original and allowed the modvat credit on the ramming mass along with other items (with which we are not concerned in the present appeal) to the respondents.
2. The learned JDR has contended that no evidence whatsoever has been brought on record to prove the use of the ramming mass by the respondents in or in relation to the manufacture of the final product in the factory. In reply to the show cause notice, they had nowhere even disclosed the use. Therefore, the modvat credit could not be allowed. On the other hand, the learned counsel for the respondents has heavily leaned on the decisions of the Tribunal as well as the Apex Court to contend that any article brought in the factory by the manufacturer and used in or in relation to the manufacture of the final product has to be treated a input or capital good for allowing the modvat credit. The learned counsel has referred to the following decisions-
1. M/s . Singh Alloys & Steel Ltd. v. ACCE, Cal.; 1993 (66) ELT 594;
2. Kesari Steel v. CCE; 1994 (74) ELT 123;
3. CCE v. A.B. Tools Ltd. & PISCO, 1994 (71) ELT 776;
4. Mohta Alloys & Steel Ltd. v. CCE, 1995 (79) ELT 505;
5. Panch Mahal Steel Ltd. v. CCE, 1969 (83) ELT 91;
6. Star Wire (I) Ltd. v. CCE, 1996 (87) ELT 470;
7. Kalyani Steel Ltd. v. CCE, 1998 (98) ELT 288; and
8. Star Wire (P) Ltd. , 1998 (111) ELT 490.
Wherein it has been observed that the items including the ramming mass used in or in relation to the manufacture of the final product, are eligible for modvat credit. The learned counsel has also contended that the words of the stature are to be interpreted as used therein and in this context, he has referred to the following judgment of the Apex Court-
1. M/s . Hemraj Goverdhan Dass v. H.P. Dave, 1978 ELT J-350;
2. Coromandal Fertilizers Ltd. v. UOI, 1979 ELT 501;
3. Portis & Sponsers (Asia) Ltd v. State of Haryana, 1993 ELT 1607
3. I have heard both sides and gone through the record. There is no dispute with the proposition of law as laid down in the above referred cases that the words used in the statute are to be interpreted in their simple and plain meaning and nothing can be added or subtracted there from. There is also hardly any dispute regarding the proposition of law laid down in the above referred cases that the ramming mass or any other goods brought in the factory by the manufacturer, if used in or in relation to the manufacture of the final products, would be eligible for modvat credit either as input or capital goods, as the case may be. But it has to be established and proved by the manufacturer before claiming the modvat credit in respect of any item that it had been used in or in relation to the manufacture of the final product. He has to disclose the manner and the mode in which a particular item had been used by him in or in relation to the manufacture of the final product. without establishing this fact, he cannot claim the modvat credit of any item as of right by simply relying upon the ratio of the law laid down in the other cases wherein credit has been allowed on similar item. Now, in the instant case, the reply to the show cause notice had been read out by the learned counsel before me during the course of argument. But in the entire reply to the show cause notice, only the workings of Rule 57-A that the item, had been used in or in relation to the manufacture of the final product has been set out. Nothing further had been alleged. In other words, the actual user of the item in question ‘ramming mass’ and the manner and purpose for which it has been used by the respondents in the factory had not been disclosed by them therefore, simply because the item is known as ‘ramming mass’ and in the above referred cases, relied upon by the learned counsel, on this item, the modvat credit had been allowed in those cases, cannot be made a ground by the respondents for claiming the modvat credit. In those cases, the user of the ramming mass, was brought on record by the assessee, whereas even an allegation regarding its the user, is missing as observed above. Even the learned Commissioner (Appeals) while reversing the order-in-original had nowhere recorded findings regarding the actual user of the ramming mass by the respondents in their factory. he has simply by relying upon the ratio of the law laid down in the above referred cases allowed the modvat credit without examining the actual user and the purpose of the ramming mass, by the respondents in their factory.
4. Therefore, in the light of the discussion made above, in my no benefit of the ratio of the law laid down in the above referred cases can be availed by the respondents. The adjudicating authority had disallowed the modvat credit to the respondents on the item in question by holding it to be not covered as input under Rule 57-A of the Rules. The Commissioner (Appeals) has reversed that order, as observed above, without going into the question of actual user of this item in or in relation to the manufacture of the final product. Therefore, the impugned order passed by the Commissioner (Appeals) cannot be sustained. However, in the interest of justice, the matter is sent back to the Commissioner (Appeals) to re-examine the issue of availability of modvat credit on the items in question i.e. ‘ramming masses’ to the respondents by making reference to its use and purpose for which has been put in the factory by the respondents after hearing both sides.
5. In view of the above, the impugned order is set aside and the appeal of the Revenue is allowed by way of remand.