1997 (2) TMI 487

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....er]. - Appellant, engaged in the manufacture of cold rolled strips falling under Chapter 72 of the erstwhile CET 1985 was availing Modvat credit on several inputs. The Additional Collector of Central Excise issued demand-cum-show cause notice stating that certain items claimed as inputs are not in the nature of inputs but are tools or parts of plant and machinery and cannot be used in or in rela....

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....been filed. 2. I will first deal with the case of Abrasive Grinding Belt falling under Heading 6802. There is no dispute that Abrasive Grinding Belt is used to remove layer of Iron oxide which gets deposited on the strips during the process of hardening and tempering of cold rolled strips, thereby giving shining to the strips and rendering them marketable. These belts are used to cover the r....

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....virtue of exclusion clause (i) of Explanation to Rule 57A of the Central Excise Rules, 1944. It was held that while machinery and plant are excluded from the purview of the Modvat scheme, parts of machines are not so excluded. In Collector of Central Excise, Bolpur v. Durgapur Cement Works - 1997 (90) E.L.T. 197 (Tribunal), a Larger Bench held that while ball mill is machinery used in the manufact....

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....would apply to these items also and it must follow that they are used in or in relation to the manufacture of final products. 4. The lower authorities held that the objected articles are either tools or parts of machinery. If they are parts of machinery, going by the decision of the Larger Bench in Union Carbide India Ltd. case, they are not covered by the exclusion clause and Modvat scheme ....