GUJARAT ALKALIES AND CHEMICALS LTD Vs. COLLECTOR OF C EX

JUDGEMENT

(1.) BOTH the aforesaid appeals arise out of the Order of the Collector (Appeals) bearing No. V-2(28 CETA) 1913/87 3548, dated 1-3-1988.

(2.) Brief facts for the purpose of disposal of these appeals can be stated as below:

(3.) SHRI D.M. Mehta, on behalf of the appellant M/s Gujarat Alkalies & Chemi cals Ltd. (GACL) contended that as per Section 37 of the Central Excises and Salt Act, 1944 as amended by the Finance Act, 1986 the Rules are to provide for the credit of duty paid or deemed to have been paid on goods used or in relation to the manufacture of ex cisable goods. In pursuance of this Sub-section to Section 37, Rule 57-A has also adopted the same language and same wording. According to Rule 57-A, goods used in the manufacture or in relation to manufacture are to be treated as inputs. By way of explana tion to that Rule inputs are those which are used in the manufacture or in relation to manufacture should include paints and packing materials but does not include machines, machinery, plants, equipments, apparatus, tools or appliances used for producing or processing of any goods or for bringing out any change in any substance or in relation to manufacture of final products. The exclusion also covers packing materials of certain categories. The contention of SHRI Mehta is that Titanium Metal Anode does not fall under any of the excluded category given in the explanation to Rule 57-A. It was also his submission that Titanium Metal Anodes is only a metal substitute for Graphite Anodes, the only difference being that Titanium Anodes stay for longer duration as compared to Graphite Anodes. When the department has not challenged the findings of the Assis tant Collector extending the MODVAT benefit in respect of Graphite Anodes, which also performs identical function there is no justification for challenging the extension of MODVAT credit in respect of Titanium Anodes. He also cited the decision of the CEGAT Special Bench in the case of departmental appeal filed against Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd., reported in 1988 (35) ELT 227 (Tribunal). While interpret ing Notification No. 201/79-C.E., with regard to the very same product, the Tribunal have held that these can be regarded as an input used in the manufacture and rejected the department's appeal. He, therefore, contended that the very same issue which has al ready been decided by the Special Bench with regard to the Notification No. 201/79 C.E., with regard to the same product is now being agitated. In case of MODVAT credit the provisions are more liberal than the restrictive ones in Notification No. 201/79. He, therefore, contended that even going by this judgment of the Tribunal, the Order of the Collector (Appeals) restricting the extension of MODVAT benefit only to the noble metal coated is unjustified. The credit should be given to the duty paid on the entire coat ing metal. On the same ground he also seeks for rejection of the departments appeal for restoration of the Order of the Assistant Collector rejecting their claim for MODVAT credit for this item as a whole.