CCE Vs. UPPER INDIA STEEL MFG. AND ENGG.

JUDGEMENT

(1.) In this appeal, the Revenue has questioned the validity of the impugned order -in -appeal vide which the Commissioner (Appeals) has reversed the order -in -original and allowed the modvat credit on the ramming mass along with other items (with which we are not concerned in the present appeal) to the respondents.

(2.) The learned JDR has contended that no evidence whatsoever has been brought on record to prove the use of the ramming mass by the respondents in or in relation to the manufacture of the final product in the factory. In reply to the show cause notice, they had nowhere even disclosed the use. Therefore, the modvat credit could not be allowed. On the other hand, the learned counsel for the respondents has heavily leaned on the decisions of the Tribunal as well as the Apex Court to contend that any article brought in the factory by the manufacturer and used in or in relation to the manufacture of the final product has to be treated a input or capital good for allowing the modvat credit. The learned counsel has referred to the following decisions -

(3.) I have heard both sides and gone through the record. There is no dispute with the proposition of law as laid down in the above referred cases that the words used in the statute are to be interpreted in their simple and plain meaning and nothing can be added or subtracted there from. There is also hardly any dispute regarding the proposition of law laid down in the above referred cases that the ramming mass or any other goods brought in the factory by the manufacturer, if used in or in relation to the manufacture of the final products, would be eligible for modvat credit either as input or capital goods, as the case may be. But it has to be established and proved by the manufacturer before claiming the modvat credit in respect of any item that it had been used in or in relation to the manufacture of the final product. He has to disclose the manner and the mode in which a particular item had been used by him in or in relation to the manufacture of the final product. without establishing this fact, he cannot claim the modvat credit of any item as of right by simply relying upon the ratio of the law laid down in the other cases wherein credit has been allowed on similar item. Now, in the instant case, the reply to the show cause notice had been read out by the learned counsel before me during the course of argument. But in the entire reply to the show cause notice, only the workings of Rule 57 -A that the item, had been used in or in relation to the manufacture of the final product has been set out. Nothing further had been alleged. In other words, the actual user of the item in question 'ramming mass' and the manner and purpose for which it has been used by the respondents in the factory had not been disclosed by them therefore, simply because the item is known as 'ramming mass' and in the above referred cases, relied upon by the learned counsel, on this item, the modvat credit had been allowed in those cases, cannot be made a ground by the respondents for claiming the modvat credit. In those cases, the user of the ramming mass, was brought on record by the assessee, whereas even an allegation regarding its the user, is missing as observed above. Even the learned Commissioner (Appeals) while reversing the order -in -original had nowhere recorded findings regarding the actual user of the ramming mass by the respondents in their factory. he has simply by relying upon the ratio of the law laid down in the above referred cases allowed the modvat credit without examining the actual user and the purpose of the ramming mass, by the respondents in their factory.