ORDER

Per K. Sankararaman:

Collector of Central Excise, Patna has filed this Appeal against the Order-in-Appeal No. 5/Pat/90 dated 25.1.90 passed by Collector of Central Excise (Appeals), Calcutta whereby he had allowed the Appeal filed by M/s Bihar Caustic & Chemicals Limited (who are Respondents herein) holding them to be eligible for Modvat benefit in respect of Titanium Anode used by them in the manufacture of Caustic Soda by the Electrolysis process. Their claim in this regard had been rejected initially by the Assistant Collector of Central Excise, Gaya, which decision was reversed in their favour by the Collector (Appeals) on appeal by them.

2. In the present Appeal, it has been urged that the Order of Collector (Appeals) is improper and unjust as the latter had, for passing the impugned order, relied upon the Tribunal order in Gujarat Alkalies and Chemicals Ltd. Vs. Collector of Central Excise, Baroda. The said order not having been accepted by that Collector, a Reference Application had been filed against the same. Further, the merits of the case had not been gone into by the Collector (Appeals). He had not given any observation on the manufacturing process of Caustic Soda-bye and the use of Titanium Anode which had been discussed in detail in the Assistant Collector's order. The latter had rightly disallowed Modvat Credit in respect of Titanium Anode as the same is merely a machinery part falling under Rule 57A(1), Explanation (b) (1) and is not an input used in the manufacture of Caustic Soda-bye. It has, therefore, been urged that the Order-in-Appeal - to the extent of allowing Modvat Credit on Titanium Anode - be set aside and the Assistant Collector's order restored.

3. The case was argued on behalf of the Appellant Collector by Shri N.K. Mandal, learned Departmental Representative. He reiterated the contentions raised in the Appeal and pleaded that the Appeal be allowed.

4. Shri S.K. Bagaria, learned Counsel for the Respondents, M/s Bihar Caustic & Chemicals Ltd. replied to the arguments advanced by Shri Mandal and the contention raised in the Appeal. He handed over a written note of submissions referring to a number of decisions taken by different Tribunal Benches as well as by the Honourable Supreme Court on the question of eligibility of credit in respect of Titanium Anode under the Modvat Scheme or in terms of Notification 201/79. In all these, Titanium Anodes had been held to be eligible for such credit. As the matter thus stands concluded in favour of the Respondents, the Appeal by the Collector may be dismissed, he concluded.

5. We have considered the submissions. We find that in a number of decisions taken by the Tribunal, credit as claimed by the present Respondents had been held to be eligible. The most important decision is in Collector of Central Excise Vs. Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd. reported in 1988 (35) ELT 227. Itwas held that benefit of Notification 201/79-CE was allowable in respect of duty paid on Titanium Substrate Soluble Anode used in the manufacture of Caustic Soda. The challenge by the Department against the said decision before the Honourable Supreme Court was unsuccessful, as briefly reported in 1992 (57) ELTA 77. We take note of the fact that Notification 201/79-CE which was involved in the said case was more restricted in scope as the eligible inputs thereunder were those used in the manufacture whereas under the Modvat scheme, the benefit extended to goods not only used in the manufacture of the final products but also those used in relation to their manufacture. It has been the consistent view in a number of Tribunal decisions that Modvat credit is allowable in respect of Titanium Anodes used in the manufacture of Caustic Soda. Some such decisions are as below:-

(1) Gujarat Alkalies & Chemicals Ltd. Vs. Collector of Central Excise - 1989 (41) ELT 424.

(2) Travancore Cochin Chemicals Limited Vs. Collector of Central Excise - 1990 (50) ELT 172

(3) Collector of Central Excise Vs. Andhra Sugar Limited - 1990 (50) ELT 289.

(4) Collector of Central Excise Vs. Standard Alkali - 1992 (59) ELT 127.

It has been stated in the Appeal that the Tribunal decision in the case of Gujarat Alkalies and Chemicals Ltd. had not been accepted by the concerned Collector and a Reference Application has been filed before the Tribunal. Merely because the Tribunal order has not been found acceptable by the concerned Collector, itdoes not mean that the said order loses its authority. Actually, the said Reference Application has been dismissed by the West Regional Bench of the Tribunal. Apart from that particular case, there have been other similar decisions, as pointed out above. The Supreme Court's upholding of the Tribunal's decision in the Gwalior Rayon Silk Manufacturing (Weaving) Co. Ltd. clinches the matter in favour of the Respondents.

6. Incidentally, we take note of the fact that the Collector has contended that the Titanium Anode in question is surely a machinery part falling under Rule 57A(l) Explanation (b) (i) and is not an input used in the manufacture of caustic soda bye. Under the provisions cited above, what are described as not being included in the scope of the expression "input" are machines, machinery, plant, equipment, apparatus, tools or appliances used for producing or processing of any goods or for bringing about any change in any substance in or in relation to the manufacture of the final products. There is no doubt about the use of the Titanium Anodes in the manufacture of caustic soda. Further, their use is not as machine, machinery, plant etc. It has been urged in the Appeal itself that they are merely a machinery part and (hence) not an input. We do not accept the point raised that machinery parts stand covered by the exclusion provision in question. What are excluded are the actual items listed viz. machines, machinery etc. and not their parts. In the circumstances, on this ground also, the Appeal fails. We accordingly dismiss the same.

7. The operative part of the order was pronounced in the Court at the end of the hearing.