Mahindra and Mahindra Ltd. Vs. Commissioner of Central Excise,

1. the question for consideration in this appeal is the eligibility to the modvat credit of the duty paid on the coated emery paper that the appellant used in its factory. in the order impugned in the appeal, the commissioner (appeals) has confirmed the denial of the credit on the ground that it is a tool and therefore falls within the scope of exclusion clause contained in the explanation below rule 57a. the contention of the appellant is that the eastern regional bench of the tribunal in its decision in cce vs. arunchal forest products 1997 (72) ecr 448 has relied upon the decision of the tribunal in cce vs.jayshree timber products 1993 (44) ecr 35 held that the paper is in the nature of tools.bajaj auto ltd. vs. cce (appeal e/602/91), the tribunal has distinguished the decision in jayshree timber. it found that the paper was used for imparting smooth finish to sheet or metal that it manufactures. it is therefore in the nature of tool. the fact that it is consumable, it gets used up after some period is irrelevant.every tool which necessarily has to operate by friction gets used up after some period. this aspect has been considered in detail in bajaj auto and rejected. i am unable to interfere.