TaxTMI 
TaxTMI 
1990 (10) TMI 213
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....ture of ceramic insulators could be considered to be an input within the meaning of Rule 57A of the Central Excise Rules, 1944 for eligibility to MODVAT credit. Shri P.C. Anand, Ld. consultant for the appellant submits that plaster of paris mould has no shelf life and for every ceramic insulator one needs a specific plaster of paris mould and, therefore, the same cannot be construed to be either a tool or an appliance for denying the appellant the benefit of Modvat credit. The Ld. consultant also referred to the ruling of the Supreme Court in the case of "Andhra Pradesh Paper Mills v. Collr. of C. Ex., Guntur" and contended that so long as it can be shown that the materials used as inputs have a nexus with the process which is integrally co....
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....to the manufacture of the final product" in Rule 57A. The ratio of the ruling of the Supreme Court, in our view, has no application to the facts and circumstances of this case and more particularly for considering a question as to whether plaster of paris moulds could be an input within the meaning of Rule 57A. In our view the moulds are not integrally connected with end-product in question and such moulds are used only as a tool or appliance for bringing about a change in the clay. Therefore, following the ratio of the Bench ruling cited supra, we uphold the impugned order appealed against and dismiss the appeal. (Pronounced in the open Court). 4. [Assent per : V.P. Gulati, Member (T)]. - I agree with the conclusion that MODVAT credit a....
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....med are used in the manufacture of sand moulds, which do not suffer any duty. The sand moulds, it has been pleaded, after their use only once, are broken after the iron castings get formed and for that reason these should be treated as intermediate goods. The point to be considered is whether the sand moulds can be considered as intermediate goods and whether by themselves these are one of the excluded category in respect of which the input credit relief under Rule 57A is not available. It is observed the term "intermediate goods" has not been defined in the Rules and has to be understood in the context in which the term "intermediate goods" is used in the trade. The general understanding of the term 'intermediate goods' is that these emerg....
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.... under : "It is thus seen that the Hon'ble Supreme Court has held that so long as it can be shown that the materials used as inputs have a nexus with the process which is integrally connected with the ultimate production of goods till the same are fit for being put in the marketing stream and such process is so integrally connected with ultimate production of goods that it would be commercially inexpedient to produce the finished goods without that process, all such inputs would get the benefit of credit of duty. It is observed that the stress is on the processes which are integrally connected with the production of the goods. Therefore, for the items to pass the test of eligibility to the benefit of the MODVAT credit will be such that t....
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....can be taken to have been used in the manufacture or in relation to the manufacture of the finished product. Generation of steam which ultimately participates in the manufacturing process is one such item. The other may be pre-treatment of the raw material which go into the manufacturing stream or the materials which may be used for making the end product ready for marketing. The use of the materials has to be such that they carry by their participation, in the manufacturing stream the process of manufacture a step further". In that case we have also considered the question of use of inputs in the machines, machinery, etc. which are employed in the manufacturing process of a specified finished product and have held that the specified inp....