V.P. Gulati, Member (T)

1. This appeal is filed by the Revenue against the order of the Collector of Central Excise (Appeals), Madras. The Collector (Appeals) has allowed the benefit of MODVAT Credit to the Respondent's paper making Unit in respect of the following items holding that the same are used in or in relation to the manufacture of paper:

(a) Hydrochloric Acid

(b) Sulphuric Acid

(c) Hydrazene 100%

(d) Sodium Sulphate.

2. The learned Collector (Appeals) has held as under in his order:

"I find from the above that it is not clear as to how it can be said that Hydrochloric acid is used for maintenance of machinery. If Hydrochloric acid is used for demineralisation of water which is to be turned into steam in part and to be utilised for spraying on the pulp, in the case, it cannot be called that demineralised water obtaining which hydrochloric acid is used, that such acid is used as a part of plant and machinery or for their maintenance. Therefore, there being no doubt of the use of Hydrochloric acid, in and in relation to manufacture of the final products, MODVAT Credit in respect of hydrochloric acid is allowed. So far as Sulphuric acid is concerned, the same is also used for t