TaxTMI 
TaxTMI 
1996 (9) TMI 367
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....re, the department held that these two items cannot be considered as inputs within the scope of the said term as per explanation to Rule 57A of Central Excise Rules. The Tribunal after careful consideration of the submissions and after examining the material on record and noticing the uses to which these two items were employed, held in para 10 of the final order as follows : "10. As can be seen from the above write up both the items are utilised as a corrosion inhibitor in cooling water system and in steam generation system. It is also an admitted fact that these inputs help in prevention of corrosion of the machinery. They are not used in the manufacture of the synthetic rubber as an ingredients or as an input. Therefore, the finding arrived at by the ld. Collector had both the items are not used "in or in relation for the manufacture of the final product" is sustainable and requires to be confirmed. As regards the citations referred to by the Ld. Advocate it is seen that the inputs which has been discussed in those citations are being utilised directly "in or in relation to the manufacture of the final product". In the present case, the items do not help in the generation of ....
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....lso made: (i)  Associated Cement Co. v. Collector of Central Excise - 1991 (55) E.L.T. 415 (Tribunal) = 1991 (36) E.C.R. 590 (ii)  Straw Products Ltd. v. Collector of Central Excise - 1992 (59) E.L.T. 572 (iii) Kapran Ltd. v. Collector of Central Excise - 1993 (67) E.L.T. 377 (iv)  Collector of Central Excise v. Asian Cables Ltd. - 1996 (81) E.L.T. 509. 2. Arguing for the appellants, the ld. Advocate submitted that where there is a conflict between the two judgments of the Tribunal then a question of law arises requiring reference to the High Court. It is also his contention that the items used are essential as a technological necessity for the manufacture of final product and hence non-grant of Modvat would be questions of law requiring reference to the High Court. It is also his contention that the items used are essential as a technological necessity for the manufacture of final product and hence non-grant of Modvat would be a questions of law requiring reference to the High Court. He also referred to the judgment rendered in the case of Shri Ramakrishna Steel Industries Ltd. v. Collector of Central Excise, Madras as reported in 1996 (82) ....
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....ocess plants in various condensors and for maintaining desired temperature of polymerisation reaction for manufacture of synthetic rubber. It is their contention that the item inhibits corrosion by forming a non-volatile film on the surface of the metal which comes in contact with steam/steam condensate. Steam generated is used in all the process plants in the manufacture of finished product synthetic rubber. The Tribunal examined the facts that the items were only used as a coolant and as a corrosion inhibitor in cooling water system in the steam generation system. The steam is used for the manufacture of the synthetic rubber. However, steam is not dutiable and there is no claim for Modvat for steam also. The Tribunal has examined the explanation to Rule 57A which defines "input" to include - (a) inputs which are manufactured and used within the factory or product or in relation to the manufacture of final product, and (b) Paints and packaging materials but does not include - (i) machine/machinery plant, equipment, apparatus, tool or appliances used for producing or processing of any goods or bringing about any change in any substance in or in relation to t....
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....qualify it to the input by itself" because it is used definitely in or in relation to manufacture of finished product. In other words, without use of this material, it would not be possible to viably indicating the manufacture of yarn. This judgment is clearly distinguishable. The Tribunal clearly found the item not being used for maintaining the machine but it was required to be used definitely `in or in relation to manufacture of the final product'. Therefore, this judgment is clearly distinguishable. In the case of Shri Ramakrishna Steel Industries Ltd. (supra), the larger Bench of the Tribunal noticed that sand moulds had played a significant role in the manufacture of the final product. It was also found that chemicals or resin which are used in the sand mixture for the purpose of producing sand moulds are used in relation to manufacture of final product namely steel castings. This case is also distinguishable, as it was found that sand mould were very necessary to create a core for the purpose of pouring molten metal. The Tribunal on facts found that the sand mould was essential for manufacture of the final product steel castings. Hence it granted the benefit of Modvat. In....