COMMISSIONER OF CENTRAL EXCISE Vs. ROCKFORT FASTENERS LTD.

JUDGEMENT

(1.) THESE are two appeals arising from Order -in -Appeal No. 84 and 85/97 (T), dated 16 -5 -1997 passed by Commissioner (Appeals), Trichy. The issue that arises for consideration is as to whether the Modvat credit can be allowed on LPG or not. The brief facts of the case are that the respondents/assessee are the manufacturers of screws, bolts, nuts etc. of Chapter 73 of Central Excise Tariff and they filed Modvat declaration for LPG (Liqueified Petroleum Gas) falling under Heading 2711.19 as fuel in the manufacture of their final products. The LPG is one of the most important input used in the heat treatment furnaces for producing Endo Gas atmosphere. One part of the LPG is mixed with 10 parts of air and it is passed inside the Retort which is having Nickel catalyst at 1050C. Nickel catalyst will crack the air/gas mixture and it will send Endo Gas inside the furnace. Assessee had contended that LPG is an inevitable consumable input in the manufacture of their final products.

(2.) THE Commissioner (Appeals) had examined the terms appearing in Rule 57A namely "in or in relation to" and had noted that LPG is essential for manufacturing the final product. In this regard, he relied on the judgment of High Court of Calcutta rendered in the case of Singh Alloy Steel Ltd., as reported in 1993 (66) E.L.T. 394; Kesari Steels reported in 1994 (74) E.L.T. 123 (T) and that of Transformers and Electricals reported in 1993 (65) E.L.T. 298 (T). He also relied on the Larger Bench judgment of the Tribunal in the case of Union Carbide India as reported in 1996 (86) E.L.T. 613 (T) which had examined the term "in or in relation to" appearing in Rule 57A of the Excise Rules. The Commissioner (Appeals) had therefore allowed the benefit on this LPG used in the manufacture of final products namely screws, bolts, nuts falling under Chapter 73.

(3.) HEARD ld. DR Smt. Aruna Gupta who relies on the grounds made out in the appeal memo.