Inputs for manufacturing process include consumable grinding media used in cement production, making Modvat credit admissible.

Steel balls used as grinding media in a ball mill for cement manufacture were held to be inputs under Rule 57A because they were essential to the grinding process and used in relation to manufacture. They were not fixed to the machinery, did not constitute the machine or any excluded plant, equipment, tool or appliance, and remained consumable goods despite minor wear entering the final product. On that basis, the exclusion clause in the Explanation to Rule 57A did not apply, and Modvat credit was admissible.

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Issues: Whether steel balls used as grinding media in a ball mill for manufacture of cement were "inputs" used in or in relation to manufacture under Rule 57A of the Central Excise Rules, 1944, and whether they were excluded as machines, machinery, plant, equipment, apparatus, tools or appliances.

Analysis: The steel balls were essential for the grinding process in the ball mill and were used in relation to manufacture of cement. They were not attached to or fixed in the machinery, and their function was to enable the grinding operation rather than to constitute the machine itself or any accessory thereto. Although a small portion of the balls wore away and entered the final product, they remained consumable goods used in the manufacturing process. On that footing, they fell within the expression "inputs" and did not come within the exclusion clause in the Explanation to Rule 57A.

Conclusion: The steel balls qualified as inputs and Modvat credit was admissible; the assessee's claim succeeded.

Final Conclusion: The appeal failed and the order allowing Modvat credit on the duty paid on steel balls was sustained.

Ratio Decidendi: Goods essential to and used in the manufacturing process, but not forming part of the machinery or excluded plant, equipment, tools or appliances, are inputs eligible for Modvat credit under Rule 57A.

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