Marketability and captive use exemption determine duty treatment of sands used for moulds and core boxes.

Prepared sands used for moulds and core boxes were treated as not excisable because marketability was not established: the Tribunal relied on evidence that the sands had only a very short shelf life, from minutes to a few hours, and distinguished earlier rulings involving different products. It also noted that the goods were used captively in the manufacture of excisable articles, so the exemption under Notification No. 217/86-C.E. was available. On that reasoning, duty was not sustained against the respondents and the appeal failed.

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Issues: Whether the types of sand prepared and used by the respondents for making moulds and core boxes were liable to duty as excisable goods, and whether benefit of Notification No. 217/86-C.E. was available where such goods were used captively in the manufacture of excisable articles.

Analysis: The duty liability turned on marketability, particularly whether the sands had sufficient shelf life to be regarded as marketable goods. The materials placed before the Tribunal indicated that the various sands had limited shelf life, ranging from minutes to a few hours, and the earlier decisions relied on by the appellant were distinguished on the basis that they dealt with a different product. The Tribunal also noted that the goods were used captively in the manufacture of excisable articles, attracting the exemption contemplated by Notification No. 217/86-C.E.

Conclusion: The sands were not held liable to duty on the reasoning urged by the appellant, and the respondents were entitled to the benefit of Notification No. 217/86-C.E.; the appeal was accordingly against the appellant.

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