ORDER
A.C.C. Unni, Member (J)
1. Arguing the Reference Application Shri M.P. Devnath, ld. Advocate submitted that by its Final Order No. A/1103/97-NB 1997 (96) E.L.T. 554 (T), the Tribunal had held that Evaporator Boats would not be eligible for Modvat credit under Rule 57A. He submitted that on this point there were also contrary decisions of the Tribunal. Impugned order had followed the earlier decision of the Tribunal in M.P. Polypropylene Ltd. v. C.C.E., Indore 1996 (88) E.L.T. 730 in which evaporator boats in the form of bowls in which aluminium wires were placed for heat treatment were held to be in the nature of tools and equipments and hence ineligible for Modvat credit as inputs under Rule 57A. Ld. Counsel argued that the above two decisions had not followed the Larger Bench decision of the Tribunal in the case of CCE v. Durgapur Cement Works reported in 1997 (90) E.L.T. 197 and Union Carbide India Ltd. v. C.C.E. reported in 1996 (86) E.L.T. 613. The Tribunal had also in the impugned order differed from its earlier decision in the case of Raxor India Ltd. reported in 1996 (86) E.L.T. 669 in which it was held that evaporation boats are eligible for Modvat credit rejecting the Department’s contention that evaporation boats were parts of machinery. He also referred in this connection to the decision of the Tribunal in the case of Apar Appliance reported in 1994 (72) E.L.T. 561, referring the question whether (sic) was ‘appliance’ for purposes of Rule 57A. He submitted that in view of the variation in the orders passed by the various Benches of the Tribunal, a question of law has arisen and this may be referred to the Hon’ble High Court under Section 35G of the Central Excise Act, 1944. The appellants have formulated the questions of law as under :
1. Whether in the facts and circumstances of the case, the Appellate Tribunal was correct in holding that evaporator boats are not ‘inputs’ within the meaning of Rule 57A?
2. Whether in the facts and circumstances of the case, the Appellate Tribunal was right in holding that the evaporator boats in question can be considered as tools and equipment and, therefore, excluded from the definition of input under Rule 57A?
3. Whether the Appellate Tribunal was right in holding that the decisions of the larger bench of the Tribunal in the case of C.C.E. v. Durgapur Cement Ltd. reported in 1997 (90) E.L.T. 197 and in the case of Union Carbide of India Ltd. reported in 1996 (86) E.L.T. 613 are not aplicable to the present case.
2. The Departmental Representative Shri A.M. Tilak agreed that there were conflicting decisions of the various benches of the Tribunal on the question of Modvat credit being allowed under Rule 57A to evaporator boats and on the questions whether they were tools and equipment.
3. The point raised in this Reference Application relates to whether evaporator boats which are used in metallising/lacquering polyester film could be considered as tools and equipments and hence not eligible for Modvat credit under Rule 57A in terms of the exclusion clause to Explanation to Rule 57A. In J.K. Cotton and Spinning Mills Ltd. v. C.C.E. reported in 1965 (16) STC 563 and in the Durgapur Cement Works’ case evaporator boat used in the process of evaporizing were held to be covered within the expression “used in the manufacture of goods”. The Department on the other hand had taken the view that because of the functional characteristics of evaporator boats, the appellants themselves had shown the item under Chapter sub-heading 8545 relating to machinery and equipment. Machinery and equipment was held to be specifically excluded from the definition of input under Explanation Rule 57A vide M.P. Polypropylene Ltd. case (Supra). It had been held that evaporator boats in the form of bowls in which aluminium wires were placed for heat treatment were clearly in the nature of tools and equipments.
4. Having regard to the submissions made on behalf of the present applicant/we find that a question of law has arisen. Accordingly, we agree with the prayer for referring the matter to the Hon’ble Allahabad High Court in terms of the three questions of law formulated by the applicants.
5. Registry is directed to draw up the Reference Application and take further action in the matter.