K. Sankararaman, Member (T)

1. These two appeals by M/s. Orient Paper Mills involve a common issue as to the admissibility of Modvat Credit for Felts, Bronze Metal Cloth, Wire Cloth and Dandy Covers used by them in the manufacture of paper, their final product. Their claim was negatived by the Assistant Collector of Central Excise, Rourkela on the ground that these are in the nature of equipment/tools/appliances. The decision of the Assistant Collector was upheld by the Collector of Central Excise (Appeals), Calcutta while rejecting their Appeals addressed to him. The two appeals presently before us pertain to credit taken in two different months, namely September 1989 and October 1989 in respect of the goods mentioned. The Appeals were heard together and are being disposed of by this common order.

2. Shri S.K. Bagaria, learned Counsel for the appellants, argued their case. He stated that the issue involved in these appeals is covered in their favour by two decisions (similar to each other) of this Bench. These are Collector of Central Excise v. Emami Paper Mills Ltd. - MANU/CK/0055/1991 : 1992 (61) E.L.T. 489 and Straw Products Ltd. v. Collector of Central Excise MANU/CK/0009/1991 : 1992 (59) E.L.T. 572. The only difference or additional factor now is that one of the disputed inputs is Dandy Cover assessed as a part of machine under the machinery Chapter 84. This item is not covered by the said decisions. The learned Counsel, however, submitted that the same ratio would apply to dandy cover also. He stated that, apart from this item, there is no distinction between the present Appeals and the earlier decided cases cited by him on the factual aspects and the legal position. There is no High Court judgment to the contrary. He pointed out that two principles had been laid down in these cases :

(1) The exclusion from the scope of the expression input, as per the Explanation in Rule 57A was only of the listed items and not their parts.

(2) The Tariff Classification of the inputs is relevant for deciding whether they are machines, machinery mentioned in the said Explanation under Rule 57A also.

3. Shri Bagaria then stated that the Honourable Calcutta High Court has, in a recent judgment in the case of Singh Alloys and Steel Ltd. v. Assistant Collector of Central Excise, reported in MANU/WB/0305/1993 : 1993 (66) E.L.T. 594, held that the items Dolopatch Mix, Magnesite Peas, and Ramming Mass are eligible for Modvat benefit when used in or in relation to the manufacture of steel. The contention of Revenue that these form part of the machinery because they are really used to protect the machinery and not for the manufacture of the ingot itself was negatived by the Court. It was observed that the items are chemicals classified as such in the Tariff. Shri Bagaria submitted that the decision of the Tribunal in Straw Products and Emami Paper Mills in applying the Tariff classification for interpreting the expressions machines, machinery etc. can be said to have been endorsed by the Honourable High Court. He also referred to the judgment of the Madras High Court in Ponds (India) Limited v. Collector of Central Excise, reported in MANU/TN/0195/1992 : 1993 (63) E.L.T. 3. He then submitted that the West Regional Bench of the Tribunal has, in a recent decision in the case of Divecha Glass Works v. Collector of Central Excise, differed from the view of this Bench in the Straw Products and Emami Paper Mills cases and referred the matter to the President of the Tribunal for resolving of the conflict of views by a larger Bench. In his view, the Emami Paper Mills and Straw Products decisions are correct and should be followed. In fact, these decisions are on stronger ground than the Singh Alloys case, the inputs being different and the manner of use also different. He also pointed out that the inputs in the Divecha Glass Works case are also different, being electrode wires and not felt, metal cloth etc. used in the paper industry.

4. The argument