2000 (1) TMI 426

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.... Appeals E/487/91 and E/23/95 contend that hydrogen used by the respondent in its factory is not an input. In the order impugned in appeal E/487/91, the Collector (Appeals) has found that the hydrogen was used to isolate the nitrogen present in the atmosphere, by reacting with the oxygen in the atmosphere leaving behind nitrogen. This nitrogen after liquefaction is used as a coolant to regulate the temperature in the vessel in which the chemical reactions leading to emergence of sodium and chloromethane take place. The Collector's reasoning that nitrogen is an essential element for the manufacture of the final product by the respondent and since the nitrogen cannot be manufactured by the respondent without using the hydrogen the latter....

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....er that hydrogen is used not to flush anything, but to produce nitrogen, detailed in the manner we have outlined earlier. 5. It now settled by the decision of this Tribunal in Union Carbide India Ltd. v. CCE - 1996 (86) E.L.T. 613 that any item which is used in or in relation to the manufacture of the final product as an input, credit of the duty paid on such input is permissible for payment of duty on the final product unless it falls within the scope of the explanation in Rule 57A, or any of the rules prohibiting taking of such credit. In the technology employed by the respondent for producing nitrogen, the use of hydrogen is essential. Nitrogen used by the respondent is in relation to the manufacture of the final product. It does....