Single-use ceramic moulds qualify as inputs under exemption rules and are not excluded as tools or appliances.

Ceramic moulds used captively in manufacturing stainless steel ingots fell within the general scope of "inputs" under Notification No. 217/86-C.E. because they were used within the factory in relation to manufacture of final products. The exclusion for machines, machinery, plant, equipment, apparatus, tools or appliances was confined to durable articles capable of repeated use. On the undisputed facts, each mould was single-use and destroyed during casting, so it could not be treated as a tool, appliance, or other excluded item. Its tariff classification under Chapters 69 or 84 was not decisive, and the moulds remained eligible for the exemption.

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Issues: Whether ceramic moulds used captively in the manufacture of stainless steel ingots were excluded from the definition of "inputs" under Notification No. 217/86-C.E. as machines, machinery, plant, equipment, apparatus, tools or appliances, and therefore ineligible for exemption.

Analysis: The moulds were used within the factory in relation to the manufacture of final products falling under Chapter 73, so they satisfied the general description of inputs under the notification. The exclusionary clause had to be read in light of the nature of the listed items, namely durable articles capable of repeated use. On the undisputed facts, each ceramic mould was used only once and was destroyed in the process of casting an ingot. Such single-use, perishable articles could not be treated as tools or appliances, or as any other excluded item in the Explanation. Their classification under Chapter 69 or Chapter 84 did not alter the position, because the decisive question was whether they fell within the exclusion.

Conclusion: Ceramic moulds were not excluded from the definition of inputs and were entitled to the benefit of Notification No. 217/86-C.E.

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