TaxTMI 
TaxTMI 
1996 (8) TMI 304
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....ed in polishing shop for high grade of deburring/polishing operation on watch cases. (b) W.P. Paper Disc : These are consumables used for fine polishing on steel surfaces to give mirror finish. (c) R.R. Clutch Belt/A.C. Belt : These are abrasive coated consumables in a form of clutch belt used in polishing shop to obtain special type finishes such as smoky/satin/matty etc. Without this process, the end-product cannot be manufactured and consumed.". 2. The learned Advocate for the appellants has pleaded that the issue now stands covered by the ratio of the decision of the Larger Bench in the case of Union Carbides India Ltd. v. Collector of Central Excise reported in 1996 (15) RLT 144 (CEGAT-WB). The learned Advocate has ....
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....Sirpur Paper Mills Ltd. v. Collector of Central Excise - 1991 (56) E.L.T. 649 (T) SRB are not correctly decided. On the other hand the decisions in Gujarat Alkalies & Chemicals Ltd. v. Collector of Central Excise - 1989 (41) E.L.T. 424 (Tribunal), WRB, Cominco Binani Zinc Ltd. v. Collector of Central Excise - 1990 (48) E.L.T. 283 (Tribunal) SRB, Travancore Cochin Chemicals Ltd. v. Collector of Central Excise - 1990 (50) E.L.T. 172 (Tribunal) SRB, Collector of Central Excise v. Standard Alkali - 1992 (59) E.L.T. 127 (Tribunal), Straw Products Ltd. v. Collector of Central Excise & Customs - 1992 (59) E.L.T. 572 (Tribunal) ERB, Collector of Central Excise v. Emami Paper Mills Ltd. - 1992 (61) E.L.T. 489 (Tribunal) ERB, and Collector of Central....
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.... that spares of such machinery, machines or other goods would also be eligible inputs but did not specifically incorporate spares in the exclusion clause (i). There is a faint argument that if spare parts are regarded as not excluded by virtue of exclusion clause (i) and Modvat benefit is extended to such spare parts, the provision is likely to be misused and all the parts of a machine may be purchased and brought to the factory and the parts assembled to become a full machine to be used in the manufacture of final product and that could adversely affect the Revenue. This apprehension is not justified. Spares or parts concerned in these appeals are to replace worn-out parts or parts which require replacement. In the example cited, credit wi....
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....t in this connection Para 29 will also be relevant and has pleaded proper inference can be drawn by reading Para 29 that the goods in question cannot be eligible for the benefit of Modvat credit. This Para 29 is also reproduced below for convenience of reference : "29. We have indicated the manner in which and the purpose for which Felts, Phosphor Bronze, Stainless steel, wire cloth, wire mesh and Dandy cloth are used in the machines in the manufacture of paper or paper products. They are definitely parts of machines not comprehended by the exclusion clause (i) of the explanation to Rule 57A of the Rules. Therefore, spares of such goods cannot be regarded as falling within this clause. We have also indicated the manner in which and th....
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....d as a consumable. Hence, I find hold that these items are in the nature of parts of machinery and are not eligible as an input. Credit of duty availed on these items are irregular and merits reversal under Rule 57(I) of Central Excise Rules, 1944." He has pleaded as would be seen these items are consumables in nature by reason of function and wear out a revision is required to be made from time to time. His plea is that the use of the item is similar to the use of Wire cloth and synthetic mesh felts in the paper mill. He has therefore pleaded that the ratio of the decision in that case would squarely apply to the facts in the present case. 5. Heard the learned JDR for the Department. He has nothing specifically to put forth by way o....