Commissioner of Central Excise Vs. Bajaj Auto Ltd.

1. the following question has been suggested by the commissioner for reference to the high court arising out of the order of the bench no.3722-23, dated 6-1-1996. "whether modvat credit will be permissible on inputs when steel shots are tools and are not covered by exclusion clause of rule 57a." 2. the bench had held that steel shots which remove the rust and other impurities adhering to the surface of steels and similar goods by striking these goods at high velocity could not be considered to be tools, because they could not perform the function unless they were projected at high speed by the shot blasting machines. the bench had observed that the shots could "at most" (not "almost" as erroneously mentioned in the application) be considered to be parts of the shot blasting machine. the question proceeds on the assumption, based apparently on the decision of the collector (appeals) that steel shots are tools. this assumption was not made by the bench in its order; it could not have been made because the point to be decided was whether the steel shots were by themselves tools. the question therefore, does not arise from the order of the bench.