1990 (3) TMI 178

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.... Collector of Central Excise (Appeals) whereby he allowed the appeals Filed before him by M/s. Heavy Engineering Corporation Ltd., Ranchi who are the respondents in the present proceedings. The Collector (Appeals) has held, inter alia, that they are eligible for Modvat benefit in respect of oxygen and acetylene used for cutting runners and risers in the castings and for welding and that the disallowance of credit on the ground that only photo copies of gate passes were produced was improper and that such credit should be granted to them. 2. When the Stay Petitions were posted for hearing before us it was indicated by the Bench to both the sides that if they are ready to argue the appeals themselves instead of confining the hearing to onl....

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....Collector, Shri A. Roychowdhury, learned JDR submitted that as urged in the appeal the goods oxygen and acetylene cannot be said to be used in relation to the manufacture of the finished product and that the nature of their use has not been taken into consideration by the Collector (Appeals) while passing his order. The goods oxygen and acetylene are used in the nature of tools and in conjunction with them for cutting purposes and as such they are covered by the exclusion in the Explanation clause of Rule 59A. 4. Regarding the other part of the appeal Shri Choudhury pointed out that if Modvat credit is allowed against photo copies of Gate Passes it will be fraught with great revenue risk because a number of Gate Passes can be copied from....

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....isers on the castings and that they are used for welding purposes. It has been contended that they are not actually used in the manufacture of finished goods but they are used as consumables in the cutting torch and in the melting (sic) operation. Therefore, it has been urged, these gases cannot be said to be used in or in relation to the manufacture of the finished product. This argument in the appeal apart, the learned JDR observed during his argument before us that these gases are in the nature of tools as they are used for cutting purposes. 7. We are unable to accept the above plea that because oxygen gas and acetylene gas are used for cutting purposes they should be treated as tools. They are consumable items and are used up while b....

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....Modal but where the welding is for a non-manufacturing operation like repair or maintenance of an equipment or machinery or a structural item the use will be neither in or in relation to the manufacture of finished goods and to that extent the oxygen and acetylene gases used for such welding will not get the Modvat benefit. 8. As regards the other question regarding Modvat credit claimed on the strength of photostat copies of Gate Passes, we agree with the contentions raised in the appeal and those urged by the learned JDR at the lime of the hearing. It was mentioned by Shri Mookherjee, learned Counsel that most of the goods in question had been received directly from the manufacturers against Gate Passes in their own name. In that case ....