Modvat credit on graphite electrodes and mercury anodes was not barred as they were not machinery, equipment or apparatus.

Rule 31 reference applications under the CEGAT (Procedure) Rules did not require the identical Members who decided the appeal to hear the reference; it was sufficient that the same Bench heard the application, so the preliminary objection failed. Graphite electrodes and mercury anodes used in the electrolytic manufacture of caustic soda were not treated as machinery, equipment, apparatus or their parts within the exclusionary explanation to Rule 57A of the Central Excise Rules, 1944, so Modvat ineligibility was not established. On that basis, the matter was held not to raise a referable question of law for the High Court.

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Issues: (i) Whether a reference application under Rule 31 of the CEGAT (Procedure) Rules had to be heard by the same Members who had constituted the original Bench that decided the appeal. (ii) Whether graphite electrodes and mercury anodes used in the manufacture of caustic soda were excluded from Modvat credit under Rule 57A of the Central Excise Rules, 1944 as machinery, equipment, apparatus or their parts.

Issue (i): Whether a reference application under Rule 31 of the CEGAT (Procedure) Rules had to be heard by the same Members who had constituted the original Bench that decided the appeal.

Analysis: The distinction between Rule 31 and Rule 31A showed that the requirement in reference matters was that the same Bench should hear the application, not that the identical Members must necessarily comprise that Bench. The President's general direction covered reference applications heard by differently constituted Benches, and a separate order for each application was not required.

Conclusion: The preliminary objection failed and the reference application was maintainable before the Bench as constituted at the time of hearing.

Issue (ii): Whether graphite electrodes and mercury anodes used in the manufacture of caustic soda were excluded from Modvat credit under Rule 57A of the Central Excise Rules, 1944 as machinery, equipment, apparatus or their parts.

Analysis: The goods in question were only graphite and mercury used as electrodes in the electrolytic process. They were not machinery, machine, equipment, tool, appliance or apparatus within the exclusionary explanation to Rule 57A, and the cited Tribunal decisions did not compel a contrary view on the facts presented.

Conclusion: The question did not justify a reference to the High Court and the departmental contention on Modvat ineligibility was rejected.

Final Conclusion: The Tribunal held that the reference application did not raise a referable question of law and declined to send the matter to the High Court.

Ratio Decidendi: For a reference application, the requirement is that it be heard by the same Bench, not necessarily the same individual Members, and electrodes used in the manufacturing process are not excluded from Modvat merely because they function in an electrolytic cell, unless they fall within the specific exclusion of machinery, equipment, apparatus or their parts.

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