TaxTMI 
TaxTMI 
2000 (5) TMI 73
X X X X Extracts X X X X
X X X X Extracts X X X X
....e eligible for Modvat Credit in terms of Rule 57 A of the Central Excise Rules, 1944." The reference has been made in view of the conflicting decisions as reported in the 1997 (96) E.L.T. 323, 1998 (97) E.L.T. 307 and 1994 (70) E.L.T. 788, on the eligibility of input credit on "Grinding Wheels" 2.The matter was heard on 29-3-2000. When the case was called, no body was present for the Appellants. Shri S.S. Srivastava, ld. SDR for the department reiterated the findings of the Commissioner (Appeals) and relied upon Singh Alloys - 1993 (66) E.L.T. 594 (Cal.) to submit that classification of inputs received is relevant to determine the eligibility of Modvat. 3.The Commissioner (Appeals)'s findings are :- "The Assistant Collector has ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f input, the "Grinding Wheel" cannot by any state of imagination be treated as input for the manufacture of iron and steel products." 4.From the materials on the record, it is found that the use of the 'Grinding Wheels' has been accepted to be in or in relation to the manufacture of the final product. It would, therefore, qualify for the definition of input, if it is not one of the items covered by the exclusion clause in the explanation to Rule 57A. 5.An analysis of the decisions cited in the reference, shows that the item 'Grinding Wheel' has been understood as follows : (a) (i) Goetze India Ltd. 1997 (96) E.L.T. 323. The Bench unanimously held, honing stone/stick to be only a part of grinding machine and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... raw materials. The third ld. Member (Technical), on reference, held that grinding wheels were not eligible with the following observations: "......I am firmly of the view that grinding wheels as well as grinding belts are in the nature of manufacturing equipment and are not in the nature of essential ingredients used in the "manufacturing process" as distinct from "manufacturing apparatus." I, therefore, agree with the Hon'ble Vice President that the32. Modvat Credit is not admissible in the said item as these have been wrongly declared as 'raw materials' the longer period has been rightly.......". Thus, the ld.Third Member has come to a finding to deny the credit on the basis of the impugned items being in the nature of manufactu....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f abrasive materials, but also when they consist of only a very small abrasive head on a metal shank, or of a centre or core of rigid material (metal, wood, plastics, cork etc.) on which compact layers of agglomerated abrasive have been permanently bonded (e.g. cutting discs of metal, etc. fitted with rim or with a series of peripheral inserts of abrasive material). The Heading also covers abrasive elements for hones, whether or not they are mounted in the carriers required for their fixation in the body of the hone. It should, however, be noted that certain abrasive tools are excluded and fall in chapter 82. The latter chapter, however, covers only those tools with cutting teeth, flutes, grooves, etc. which retain their identity and fun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted in 1993 (66) E.L.T. 594 (Cal.). The High Court observed that it is settled law that the phrase 'in relation to' has a wide connotation [See Renusagar Power Co. Ltd. v. General Electric Co. : AIR (1985) SC 1156; Doypack Systems Pvt. Ltd. v. Union of India & Ors. : AIR (1988) SC 782 = 1988 (36) E.L.T. 201 (S.C.)]. The Court also observed in paragraph 22 of the judgment that "The Tribunal has erred in seeking to limit the meaning of the word 'inputs' to those items which go into the steel ingot completely overlooking the phrase 'in relation to' in the definition in the major clause of the explanation". The Hon'ble High Court also took note of the definition of various items like apparatus, appliance, equipment, machine, machinery, plant an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pendently operating/functional items and not parts. 11.The Larger Bench of the Tribunal considered the scope of the exclusion clause in Rule 57A in its judgment in the case of Union Carbide India Ltd. v. Collector of Central Excise, Calcutta - I reported in 1996 (86) E.L.T. 613 (Tribunal). It held as under in paragraph 26 :- "26. The language of exclusion clause (i) is plain and clear. It carves out "machines, machinery, plant, equipment, apparatus, tools or appliances.....". These expressions indicate a self-contained unit, complete unit or whole unit but not any part thereof, unless of course, such part is also a complete unit in itself. The intention to exclude parts also along with machines, machinery and such other goods cannot b....