V.P. Gulati, Member (T)

1. This appeal is against the order of the Collector of Central Excise (Appeals), Madras. The issue involved in the appeal relates to eligibility to MODVAT credit in respect of Molybdenum plates and Tungsten nozzles. The learned lower appellate authority has held that MODVAT credit is not available in respect of the two items in view of the proviso to Rule 57A under which machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods are not considered as inputs for the purpose of MODVAT credit Under Rule 57A and that the two items are in the nature of apparatus or appliances. The learned lower appellate authority has also relied upon the decision of the West Regional Bench in the case of Mukund Iron and Steel Works Ltd. v. C.C.E., reported in MANU/CM/0001/1989 : 1990 (45) E.L.T. 84 (Tri.) and has referred to the observation of the Tribunal in that case that the materials which are required for effective functioning and maintenance of the machinery would stand excluded from the purview of the MODVAT Scheme. Adverting to the use of the two items, the learned lower appellate authority has entered the following findings:

"In this case also, tungsten nozzles and molybdenum plates are in the nature of material which bring into or shape the end-product rather than are in the nature of materials fed into the manufacturing process for chemical reaction or for improving the quality of the ceramic fibres. The fact that tungsten nozzles are rendered unfit for further use after a period of 25 to 30 days and the molybdenum plates get solidified into the molten mass and cannot be salvaged on account of the nature of the process of manufacture, would not detract from the real nature of their function in the manufacturing process."

2. The learned Advocate for the appellants pleaded that the appellants are manufacturers of Ceramic fibres and in the manufacture of the same a mixture of Calcined Alumina and Silica sand is converted into a molten mass in electric furnace. His plea is that the Molybdenum plates act as electrodes and they carry the current required for the furnace to melt the Alumina Silicate mix and are used in conjunction with water cooled electrode jackets and that the same lasts for about 1000 hours or so. He has pleaded that the Molybdenum is capable of standing very high temperature the melting point of the same being 2600°C. He pleaded that electrodes, therefore, have to be considered as inputs as defined under Rule 57A. He referred us to the literature on Tungsten Molybdenum in the form of GE Data Sheet (Product Data Sheet 7230-A May 1, 1989). Under this the uses of Tungsten and Molybdenum have been set out as under:

"Tungsten and molybdenum are widely used for high temperature parts in lamps and electronic tubes as well as in such non-lamp applications as kiln furniture, furnace boats, heating elements, and heat shields on rockets."

He also drew our attention to the technical write-up filed by the appellants wherein the use of the electrodes is set out as under :

"There are three electrode assemblies, each consisting of one number water cooled MS jackets and two numbers Molybdenum plates of size 100 mm x 115 mm x 3 mm thickness. These electrodes have to carry a current of the order 900 amps and has to withstand temperature upto 2000 C. The Moly plates and a portion of the water cooled electrode jackets is immersed in the molten material (sketch enclosed).

Molybdenum has a melting point of 2621°C This is the best material available for conducting electricity as well as withstanding the melt temperature.

The liquid melt moves continuously from the Moly electrodes towards the nozzle and due to this the Molybdenum plate gets eroded and mixes with the molten Alumina-Silicate melt."

He has also cited the case of W.S. Industries (India) Ltd. v. CCE, reported in MANU/CC/0057/1990 : 1991 (56) E.L.T. 433 (Tribunal), in support of his plea. In regard to Tungst