V.P. Gulati, Member (T)

1. These are appeals against the order of the Collector of Customs & Central Excise (Appeals), Madras, dated 30-3-1988.

2. The short point to be decided in the appeal is whether the inputs used in the making of sand moulds which are used in turn for making the castings can be taken to be inputs having been used in the manufacture of steel castings for the purpose of availing MODVAT credit under Rule 57A.

3. The learned lower authority has held that inasmuch as the inputs used in the manufacture of sand moulds are concerned these are to be taken to have been used in relation to the manufacture of sand moulds, which have to be considered as in the nature of equipment or apparatus which are specifically excluded from the purview of the MODVAT credit in terms of Rule 57A. The findings of the lower authority in the impugned order are as under:

"If the result of manufacture, with the inputs, is machinery, equipment, appliance etc. then such inputs cannot be said to be used in the making of steel castings. Machinery, plant, equipment, appliances etc. are not covered by the word 'input' used in Rule 57A of the Central Excise Rules. Appellants have stated that sand mould is not an equipment, because it is not used repeatedly in making of steel castings. This contention is not correct. Equipment need not be for repeated use, in manufacturing the finished product. The dictionary meaning of the word "equipment" as per Concise Oxford Dictionary is "provide (oneself with) for journey etc., - hence equipment." The word 'Appliance' means "thing applied as means to an end". Thus, the sand mould, is both an equipment and more appropriately an appliance. The casting is made with application of such sand moulds. The inputs brought, duty paid, and used in making an equipment or appliance cannot be said to be used in or in relation to the manufacture of the final or finished product by the appellants."

4. The learned C.A. for the appellant pleaded that the appellants had brought in specified inputs in their factory in which they are manufacturing castings. For the purpose of making the castings, he pleaded, the sand moulds are first required to be prepared and in the manufacture of these sand moulds the inputs in question have been used. He pleaded, the sand moulds should be taken as an intermediary product in the manufacture of castings and the benefit of the input credit available in respect of the castings should be allowed. He pleaded that the sand moulds prepared are used only once and after the casting is formed the same gets destroyed. He pleaded the mould cannot be treated as 'tool'. He further pleaded that the sand moulds were not chargeable to duty being exempted. However, he pleaded, notwithstanding this in terms of Rule 57D, under which when specified inputs are used for the manufacture of the intermediary products, which are exempt from duty, the benefit of MODVAT credit is available and the appellants' plea for benefit will have to be allowed. He pleaded that RT.12 returns were filed and the credit on the inputs taken was shown in that and which was disallowed.

5. The learned Senior D.R. pleaded that the plea regarding Rule 57D has been taken by the appellants for the first time before the Tribunal. In any case, he pleaded, the sand moulds are a product which by itself stands precluded from the benefit of the input credit relief as provided under Rule 57A and, therefore, the products which go into the making of the same are not eligible for the benefit of the MODVAT credit. He pleaded that the moulds cannot be treated as an intermediate product as they do not emerge in the process of the manufacture of casting. He pleaded that the appellants had filed separate classification list for sand moulds and had also filed RT.12 returns for the moulds separately, thus showing that the sand moulds are separate category of goods and the credit eligibility has to be with reference to the moulds and in case the appellants ar