Decided on April 30,1991



T.P.Nambiar, - (1.) THIS is an appeal filed by the department being aggrieved by the order passed by the Collector of Central Excise (Appeals) in order No. 36/Cal. 1/90 dt. 14-2-1990. In terms of that order he allowed the appeal filed by the appellants and held that dissolved acetylene and compressed oxygen gas is entitled for Modvat credit.
(2.) Sri B.B. Sarkar, learned JDR, appearing for the appellant Collector vehemently contended before me that dissolved acetylene and compressed oxygen gas is used by the respondent for purposes of cutting by the flames obtained through these two gasses. He, therefore, contended that the use of gas in essence is to cut the materials and, therefore, the same has to be termed as a cutting device. It was therefore contended that the same is excluded by exclusion clause of Rule 57A as a tool. He also stated that in this behalf trade notices were issue by the department previously holding that the gas so used is not entitled for Modvat credit. Replying the above said contention, the learned Advocate Sri Mookherjee contended that it is not desputed that this gas is used in the manufacture or in relation to the manufacture of weighing machine. In this regard he contended that the same cannot be termed as a tool. He brought to my notice the clarification issued by the Board which is reported in the 11th Modvat-cum-Procedures Meeting dated 22nd January, 1991 held at Coimbatore, wherein at SI. No. 32 it was stated that instructions have already been issued by the Board clarifying the matter. It was stated therein that Modvat should be allowed to oxygen and acetylene gas when they are used to cut into small pieces raw materials to be used for an end-product. Relying on the above said instructions of the Board and on a construction of Rule 57A, Sri Mookherji contended that dissolved acetylene and compressed oxygen gas is entitled for Modvat credit, as they were used exclusively for cutting and welding purposes for the manufacture of the weighing machine.
(3.) SRI B.B. Sarkar, learned JDR, in reply, contended that, even if the instructions issued by the Board are to be taken into account, they will come into effect only from the date of such instructions and not previous to the same.;

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