Customs, Excise and Gold Tribunal - Mumbai
Alembic Chemical Works Co. Ltd. vs Commr. Of C. Ex. And Cus. on 18 December, 1997
Equivalent citations: 1998(100)ELT360(TRI-MUMBAI)
ORDER K.S. Venkataramani, Member (T)
1. These appeals arise out of the common impugned order passed by the Commissioner of Central Excise & Customs (Appeals) Ahmedabad captioned above. By that order the Commissioner (Appeals) has disposed of two appeals filed by the assessee/appellants and another two appeals filed by the department against the orders passed by the Assistant Commissioner of Central Excise Div. III, Vadodara. The Assistant Commissioner allowed Modvat credit in two appeals on the ground that input Dicamol used as a filter aid in the antibiotics plant, does not have any function of its own, as it is not actually used in the manufacturing process. The Department's appeal before the Commissioner (Appeals) was against the order of the Assistant Commissioner allowing Modvat credit on dicamol powder, on the ground that it is used in relation to the manufacture of the finished goods. It was the contention of the department that dicamol is an earth product which is used in Chemical industry as an aid to increase filtration rate without involving any chemical reaction. It prevents the blocking of holes of filter media and maintains adequate porosity. Therefore, the Department took the view that it is in the nature of an equipment and hence excluded from the definition of input under Rule 57A of the Central Excise Rules for Modvat purposes. The Commissioner (Appeals) found that dicamol powder does not take in any chemical process in the manufacture of the final product by the assessee appellant and hence concluded that it is a part of the perforated rotating drum fitted with the filter cloth, and hence with the excluded from the definition of input under Rule 57A. In this view of the matter he dismissed the appeals filed by the assessee appellant and allowed the appeals filed by the department. The present appeals are by the assessee appellants against this order of the Commissioner (Appeals).
2. We have heard Shri R.C. Saxena the ld. Counsel for the appellants and Shri S.V. Singh the ld. JDR. We find that as has been submitted by the ld. Counsel that the matter now stands settled by the Larger Bench decision of the Tribunal in the case of Union Carbide India Ltd. v. Collector of Central Excise -1996 (86) E.L.T. 613 (Tribunal) wherein the Larger Bench has construed the ambit and scope of the expression "used in or in relation to" the manufacture of the final product which occurs in Rule 57A of the Central Excise Rules. The Larger Bench observed that purpose of incorporating the words "in relation to the manufacture" under Rule 57A the purpose is certainly to widen further the scope, ambit and content of "inputs" under the Rule. The Larger Bench held that the purpose is to widen the ambit so as to attract also goods which do not enter directly or. indirectly into the finished product, but are used in any activity concerned with or pertaining to the manufacture of finished goods. He further find that an input like Steel Wire Cloth, Wire Mesh used in paper production has been specifically held to be covered by the term input in the Larger Bench decision itself. The ratio thereof is clearly applicable to the Dicamol filter aid material in the present case. We accordingly set aside the impugned order and allow the appeals.