Per JyotiBalasundaram - The issue of eligibility to Modvat credit of Fire Bricks and Dead Burnt Magnesite used in the manufacture of steel arises for determination in the above appeal filed by the Department against the order of the Collector (Appeals), New Delhi. The authorities below had extended modvat credit on these two items treating them as inputs for the manufacture of steel. The case of the Department is that these items are not consumable inputs, do not form-part of the finished product, and require frequent replacement and, therefore, form a part of machinery or equipment for producing final product and hence excluded from the benefit of modvat in terms of Explanation 1 (b)toRule57Aof the CESA, 1944. On the other hand the respondents contend that the items are consumable inputs used in the manufacture of steel; they are use to line the electric are furnace and serve the Same purpose as ramming mass. In fact, the Fire Bricks are nothing but a solidified form of ramming mass and applying the ratio of the Hon'ble Calcutta High Court in the case of Singh Alloys & Steel Ltd. Vs. Assistant Collector of Central Excise reported in 1993 (66) ELT 594 (Cal), extending modvat to ramming mass (which judgement has been followed by the Larger Bench of this Tribunal in the case of A B. Tools Ltd. and Punjab Iron & Steel Company P. Ltd, (Order No. A/229 and ?.30/94-NRB dated 23.2.94) the two items in dispute in this appeal should also be held eligible for benefit of modvat credit.

2. We have heard Shri V.C. Bhartiya, learned DR and Dr. A.M. Singhvi learned Advocate along with Shri C. Mukhopadhyay, learned Advocate, carefully considered their submissions and perused the technical literature on record. At the outset, the learned DR concedes that the ratio of the Calcutta High Court judgement in the case of Singh Alloys (supra) wherein ramming mass has been held to be an input for the manufacture of steel eligible to the modvat benefit, will be applicable to dead burnt magnesite which is also a type of ramming mass. We, therefore confine our findings to the eligibility of Fire Bricks to modvat.

3. The respondents manufacture steel using electric are furnace in which raw materials scrap, ferro alloys, etc. are processed with the help of electricity, electrodes, additives, consumables, refractories and other inputs. In the course of manufacture of ingots and billets, fibre-bricks melt along with liquid metal, and after about 100 to 200 heats remaining part of fire bricks have to be removed and fresh lining has to be put in the furnace for further processing. Refractories like fire bricks have chemical contents generally in the form of magnesium oxide, calcium oxide, etc. They are indispensable items in the manufacture of steel. According to "Introduction to Refractory Products by P.T. Rothen buchler" - "Refractory products have to be able to deal with heat and energy emanating from a variety of substances - ignited solids, liquids, gases without undergoing intrinsic change. They are not part of the construction materials of process equipment - refractory linings are distinct from the structure of the unit concerned. Refractories do not merely resist heat and withstand rapid changes in the temperature. But they also participate in facilitating certain chemical reaction in the steel making furnace which remove harmful elements 1ike phosphorus and sulphur for e.g. 3 (CaO) +5 (FeO) +2 - (3CAO. P205) + (Fe) (CAO + (S) + (M) = CaS) + (MO). Specifications of refractories used depend upon the nature and kind of steel manufactured i.e. whether mild steel, high carbon steel, alloy steel, etc. They are consumed with a short period of after one cycle and are non-reuseable."

2.1 Dr. S.S. Ghose, Ex-chairman of the Development Panel for the Refractory Industry, Directorate General of Technical Development, Government of India has opined (page 36 of the paper book No. 1) that: "

The ability to withstand high temperature is critical to classifying a mat