Modvat credit on consumable input used to clarify cane juice allowed because it was not plant or apparatus.

Phosphoric acid used in sugar manufacture for clarification of cane juice was treated as an input under Rule 57A, not as machinery, plant or apparatus. The acid was added to the juice as a consumable ingredient in the clarification process and functioned to precipitate colloids and colouring matter. Because it was not identifiable with the treatment equipment, it was not excluded from Modvat credit merely because it assisted the process or was used in conjunction with apparatus. The assessee's claim for Modvat credit therefore succeeded.

---

---

Issues: Whether phosphoric acid used in the manufacture of sugar for clarification of cane juice was an input entitled to Modvat credit under Rule 57A of the Central Excise Rules, 1944, or whether it was to be treated as identified with apparatus used for treatment of the juice and therefore excluded from credit.

Analysis: Phosphoric acid was used as an input in the product mix and was added to cane juice for clarification. It was not an item that could be identified with machinery, plant, or apparatus used for treatment of the juice. The material was an input required in the clarification process, and the reasoning that it merely assisted the apparatus could not be accepted. The functional role of the acid in precipitating colloids and colouring matter showed that it operated as a consumable input in manufacture, not as plant or apparatus.

Conclusion: The item was eligible for Modvat credit and the assessee's claim succeeded.

Ratio Decidendi: A consumable used in the manufacturing process as an input to clarify or treat the product is not excluded from Modvat credit merely because it assists the process or is used in conjunction with equipment.

---