MODVAT credit on pyrometric cones allowed where the item only aids firing control and does not process goods.

Pyrometric cones used in a furnace to indicate the degree of firing of ceramic material were treated as an aid to manufacturing, not as excluded machinery or apparatus under the Rule 57A Explanation. Although the cone could be described as an apparatus or appliance, it did not itself produce, process, or alter the goods; it only indicated whether the required firing stage had been achieved. On that basis, it was regarded as used in relation to manufacture and not hit by the exclusion from MODVAT credit. The assessee's claim to credit was therefore accepted on merits.

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Issues: Whether pyrometric cones used in a furnace to indicate the degree of firing of ceramic material were excluded from MODVAT credit under Rule 57A of the Central Excise Rules, 1944 as an apparatus or appliance used for producing or processing of goods, or whether they were admissible inputs used in or in relation to manufacture.

Analysis: The cone was treated as a device for ascertaining the temperature and the degree of firing, and therefore answered the description of an apparatus or appliance. However, the exclusion in the Explanation to Rule 57A applied only to machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing goods or for bringing about any change in the substance in relation to manufacture. The cone did not itself process the material or bring about any change in the substance; it merely served as an aid to indicate whether the required degree of firing had been achieved. On that basis, it was used in relation to manufacture and did not fall within the excluded category.

Conclusion: The pyrometric cone was held admissible for MODVAT credit and the assessee's contention succeeded on merits.

Ratio Decidendi: An article that merely serves as an essential aid in the manufacturing process and does not itself produce, process, or alter the goods is not excluded from MODVAT credit merely because it can be described as an apparatus or appliance.

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