JUDGMENT
Jyoti Balasundaram, Member (J)
1. Modvat credit has been denied on the following items on the ground that they are not inputs eligible for modvat credit under Rule 57A of the Central Excise Rules:-
[i] Bottom Pouring Set
[ii] Roof set and Morter
[iii] Clay Graphite-Stopper Head
[iv] Insulating Sleeves/Calpad
[v] Hot top powder
[vi] Oxygen gas
The grounds for denial of credit as seen from the impugned order is that no submissions had been made by the appellants to contravent the findings of the Additional Commissioner that the goods are not entitled to modvat credit. At the outset it is stated by the appellants that the denial of credit on these items by the Assistant Commissioner was challenged by them in their appeal before the Commissioner (Appeals) by relying upon the Larger Bench decision in the case of Shri Ramakrishna Steel Industries Ltd. v. Collector, but they had no opportunity to explain in detail as impugned order was passed without granting personal hearing to them. However, since the items have been held to be eligible to credit by several decisions of the Tribunal. He prays that credit may be extended to items in dispute and the appeal allowed.
2. Ld. DR opposes the prayer highlighting the aspect that the goods are not inputs within the meaning of Rule 57A of the Central Excise Rules.
3. We have carefully considered the rival submission. The use of each item is set out as under:-
[I] Bottom Pouring Set: – These are refractory bricks, which are lined in the electric are furnace to form a passage to flow the liquid molten metal of high temperature in the sand moulds.
[ii] Roof Set and Morter: – This is also a refractory material used in the electric are furnace as lining material to form a passage to flow the liquid molten metal.
[iii] Clay Graphite:- Stopper Head: – This is also a refractory material used in the bottom pouring ladle to open and stop and thus control the flow of hot liquid metal as and when required to fill up the cavity of moulds and risers.
[iv] Insulating Sleeves/Calpad: – These are Exothermic insulating sleeves used to keep the temperature of hot liquid molten metal in the risers for a longer time to avoid shrinkage and cavities in the castings.
[v] Hot Top Powder: – This is a chemical powder which is used to cover the hot liquid metal in the riser to insulate and keep the atmospheric temperature.
[vi] Oxygen Gas: – This gas is used in the manufacturing stream for oxidation purposes, and removing impurities in the molten metal. This gas is also used for cutting runners and risers and other extraneous metalic elements on the inner and outer surface of the castings, after they are taken out of the mould.
4. From the above it is seen that the items in dispute are in the nature of refractory material used in the furnace Refractory material has been held to be eligible to modvat credit under Rule 57A or Rule 57Q either as input or capital goods. The decisions of the Tribunal in this regard include the decision in the case of Steel ingots Limited v. Commissioner of Central Excise, Indore [1997 (93) ELT 153 (Tribunal)] which covers Bottom Pouring Sets, Refractory Bricks, Kalyani Steel Ltd. v. CCE, Pune [1998 (99) ELT 620 (WRB)], CCE, Jamshedpur v. TISCO Ltd. [2000 (88) ECR 45] etc.
5. Oxygen Gas is also held to be an ‘input’ eligible for modvat credit under Rule 57A, by the Tribunal’s decision in the case of CCE Chandigarh v. Shiv Industries [1997 (93) ELT 174].
6. Since the items in dispute have already been held to be eligible to modvat credit, we set aside the denial of credit on these items, and allow the appeal.
(Pronounced in Court)