1995 (6) TMI 134

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....in respect of Lead Ingots used by them in relation to the manufacture of Rubber Hose Pipe. He set aside the order-in-original passed by Assistant Collector of Central Excise, Khardah Division, disallowing the Modvat credit claimed by the present respondents on the ground that the Lead Ingots in question are actually being used by them as mould for moulding the final product and hence it is not an input in this regard but in reality an appliance necessary for shaping and processing of their final product. He had relied upon the Explanation appended under Rule 57A of the Central Excise Rules, 1944 in terms of which the term `input' does not include machines, machinery, plant, equipment, apparatus, tools or appliances which are used for produc....

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..... The decision of the Tribunal in the case of SAE India Ltd. which was relied upon by the Collector (Appeals) in coming to his decision has been distinguished. In the manufacturing process discussed in the abovesaid case, Lead was consumed alongwith Zinc in the process of galvanisation and it was on that account Lead was held to be an eligible input for availment of Modvat credit. But in the present case Lead Ingot is used to produce Lead Mould which in turn is used to give a particular shape to the Hose Pipe. Such use is an appliance for shaping and processing of the final product and hence this cannot be construed to be used as an input within the framework of Rule 57A. It has, therefore, been pleaded that the impugned order in appeal pas....

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....I have considered the submissions made by both sides. I have perused the record as well as the authorities cited. From the discussion contained in the show cause notice and the order-in-appeal passed by the Assistant Collector, I find that after the Rubber Hose Pipe is initially formed molten lead is passed on its outside so that a coating of lead is formed on the raw Hose Pipe. The Hose Pipe so coated with lead is then sent for curing. After the curing process is completed the outer lead coating is scraped off which is then melted and recycled for further operations. From the manner of coating of the Rubber Hose Pipe with molten lead, it cannot be said that Lead Mould is produced and it is then used for giving shape to the Rubber Hose Pipe....