2001 (11) TMI 206 - AT - Central Excise

Summary

Issues:
Eligibility of credit under Rule 57R for duty paid on machines used in the factory to make sand moulds and sand cores exempted from duty.

Analysis:
The appeal considered the eligibility of credit under Rule 57R for duty paid on machines used to make sand moulds and sand cores exempted from duty. The Commissioner (Appeals) upheld the finding that credit was not available as sand moulds and sand cores were exempted from duty. The appellant argued that sand moulds and sand cores are not excisable commodities and are exclusively used in the manufacture of metal casting. The appellant relied on the decision of the Tribunal in Shri Ramakrishna Steel Industries Ltd. v. CCE - 1996 (82) E.L.T. 575 and other Tribunal decisions to support their contention.

The Larger Bench of the Tribunal in Shri Ramakrishna Steel v. CCE noted that sand moulds are an intermediate step in the manufacture of steel castings and have no independent function or purpose other than being used as a mould for casting. Sand moulds are considered intermediate products, satisfying the provisions of sub-rule (2) of Rule 57R. The machinery used for making sand moulds is considered capital goods under Rule 57R. The judgment highlighted that sand moulds are specified as final products in the annexure to Rule 57Q, further supporting the argument that the machinery used for making sand moulds qualifies as capital goods.

In conclusion, the appeal was allowed, and the impugned order was set aside, ruling in favor of the appellant's eligibility for credit under Rule 57R for duty paid on machines used in the factory to make sand moulds and sand cores exempted from duty.