ADDISON AND CO. LTD. Vs. CCE

JUDGEMENT

(1.) THIS appeal has been filed by M/s Addisson and Co. Ltd., and is directed against Order in Appeal No. 229/92(M), dated 6.10.1992 by which the Learned Commissioner (Appeals) has rejected their claim for MODVAT credit on grinding wheels and coating/peeling compound.

(2.) AGGRIEVED by this order, the appellants have come in appeal on the ground hat the grinding wheel has been treated as a tool and part of the machinery by applying the ratio in the matter of Andaman Timbers Case, where the Department had denied MODVAT credit to ALOXIDE paper used by them holding the same as a tool under Rule 57A. Since tools are excluded from the category of inputs, the ruling in the Andaman Timber Case is very much relevant to the present case and the Learned Collector has erred in wrongly stating that this judgment is not relevant. As regards the grinding wheels, they are classified in Chapter 68 and as per this Chapter no tools are excluded from this chapter. Therefore, grinding wheels are not tools as per the Tariff, the appellants in their own case, have been allowed MODVAT credit on rust preventive oil and the compound being on the same footing which is applied on the tool itself. The order of the learned collector is not sustainable in law and has to be set aside by granting them consequential relief. Ld. Advocate relied on Tribunal judgment rendered in their own case , wherein, MODVAT credit was allowed to anti -rust and anti -corrosion oil applied to finished tools before putting the goods in the market stream because application of oil was incidental and ancillary to the manufacture of the product within the meaning of Rule 57A of the Central Excise Rules, 1944. The Learned Advocate also invited my attention to Para 30 of the judgment rendered by the Tribunal in the matter of Union Carbide India Ltd. v. CCE, Calcutta -I 1996 (66) ECR 172 (T) and the judgment rendered by the Tribunal in the case of Batliboi and Co. v. C.C. Baroda reported in 1988 (97) ELT 307 (T) : 1998 (74) ECR 251, wherein, it was held that MODVAT credit is available on grinding wheels as parts of grinding machine is used for smoothening the surface of the components manufactured, therefore, entitled for MODVAT under Rule 57A ibid.

(3.) THE Learned DR Shri Mani reiterated the findings by the Learned Collector (Appeal).