TaxTMI 
TaxTMI 
2009 (7) TMI 727
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....Grinding Wheels i.e. the parts of grinding machines/machinery are eligible for availing modvat credit under Rule 57-A of the C. Ex. Rules, 1944 when such machines, machinery, plant equipment, apparatus, tools of appliances etc. have been specifically excluded from such eligibility in terms of the Explanation under the same very Rule." 2. The brief facts giving rise to the present reference are that the respondent assessee, namely, M/s. Batliboi & Co. Ltd., Udhna was holding central excise license for the manufacture of excisable goods falling under Chapter 8473 of the Central Excise Tariff Act, 1985 and was availing benefit of Chapter VAA of Central Excise Rules, 1944 and availing credit of duty paid on the goods (inputs) used in or in r....
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....l Rs.30,837.34, wrongly taken and utilized by the respondent assessee should not be disallowed and recovered under Section 57-I of the Central Excise Rules, 1944. 3. The above show cause notice was adjudicated and order dated 6.2.1991 was passed by the Assistant Collector, Surat disallowing the credit of Rs.30,837.34 and in case the said credit has already been utilized, they should pay an amount equivalent to the amount disallowed under Rule 57-I of the Central Excise Rule, 1944. 4. Being aggrieved by the said order of the Assistant Collector, the respondent assessee preferred an Appeal before the Collector of Central Excise (Appeals), Bombay who vide his order dated 24.10.191 dismissed the said Appeal and held that Grinding Wheel is....
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....rtment has submitted that the Grinding Wheels are accessories, which are added to the grinding machines, on which various rough coatings and other components are smoothened and their surface is worked so as to give it specific shape or to remove surface defects etc. She has further submitted that grinding wheel in itself has no use unless and until the same is added to a grinding machine. The Grinding Machine has to be construed as a composite machine having the mechanical portion for providing necessary speed or rotation and the grinding portion consists of grinding wheel. She has further submitted that Rule-57A of the Central Excise Rules, 1944, excludes certain types of input which, inter alia, excludes plant and machineries. For manufac....
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....entral Excise Tariff Act. The real question for this Court to decide is as to whether grinding wheels are to be considered as input within the meaning of Rule-57A and are entitled to modvat credit. Similar question arose before the Full Bench of the New Delhi Tribunal in the case of Collector of Central Excise, Bolpur Vs. Durgapur Cement Works (Supra) wherein it is held that, Ball Mill is the machinery used for manufacture of Cement. Ball Mill can of course be switched on without Steel Balls but it cannot perform the process of grinding without using Steel Balls on the machine. Steel balls are most essential for the process. One of manufacturing process is grinding. Grinding takes place on account of the impact of Steel Balls on the raw mat....
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....les, 1944. 11. In the case of Andhra Pradesh Paper Mills Ltd., Vs. Collector of Central Excise, reported in 1990 (50) E.L.T. 252 (Tribunal), it is held that for the items to pass the test of eligibility to the benefit of modvat credit will be such that they participate in the process of manufacture without which the end product cannot be produced. In that case, the chemicals were used for the purpose of softening of water; the same were considered to be a process which was for the manufacture of paper and softening of water is a requirement for the manufacture of paper. Soda Ash and Alflock power used in this process are eligible for the benefit of modvat credit. 12. In the case of Collector of Central Excise and others Vs. Solaris Ch....