R. Jayaraman, Member (T)

1. This is an appeal directed against the order of the Collector (Appeals) bearing No. V-2(72) 2521/87 3454, dated 1-3-1988.

2. Facts of the case for the purpose of disposal of this appeal can be stated as below:

3. The appellants are manufacturers of iron and steel products. They had opted for availing of MODVAT benefit in respect of inputs used in or in relation to the manufacture of finished product and accordingly they filed a declaration as required under Rule 57G of the Central Excise Rules. The department objected to the extension of credit in respect of refractory products, namely Bricks, Blocks and other ceramic materials like ramming mass, refractory mortar. Before denial of the MODVAT credit, a show cause notice was issued to the appellant and after observing principles of natural justice, the Assistant Collector passed an order holding that the aforesaid goods, which are claimed as inputs are not covered by the explanation to the term 'in put' given in Rule 57A of the Central Excise Rules and therefore disallowed the appellants for availing of MODVAT credit in respect of duty paid on these goods. The matter was taken up in appeal before the Co