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of <h1>Tribunal grants stay to Hindustan Motors Ltd. in modvat credit dispute.</h1> <h3>HINDUSTAN MOTORS LTD. Versus COLLECTOR OF CENTRAL EXCISE</h3> The Tribunal granted a stay in favor of M/s. Hindustan Motors Ltd. in a Stay Application concerning the recovery of a due amount following an ... Stay/Predeposit of duty Issues:Stay application seeking recovery of amount due from order-in-appeal, admissibility of modvat credit for resins in sand moulds manufacture, interpretation of Rule 57A, applicability of Supreme Court judgments on manufacturing process.Analysis:The judgment revolves around a Stay Application filed by M/s. Hindustan Motors Ltd. to halt the recovery of a due amount following an order-in-appeal by the Collector of Central Excise (Appeals), Calcutta. The Collector (Appeals) partially upheld the Order-in-Original, stating that modvat credit for resins used in sand moulds for manufacturing parts of motor vehicles and engines was not admissible.Shri S.K. Bagaria, representing the applicants, argued that the sand moulds were temporary and not durable goods, formed during the casting process and not independently marketable. He cited a previous appeal by M/s. Balaji Steel Castings supporting their stance. Despite adverse decisions by other Regional Benches, Bagaria contended that the resins were essential for the casting process and not exclusively for sand moulds, citing Rule 57A and Supreme Court judgments on manufacturing processes.On the other hand, Shri M.N. Biswas, for the respondent Collector, supported the order, emphasizing the correct application of Rule 57A. He dismissed the applicability of Supreme Court judgments on manufacturing, focusing on the use of resins in sand mould preparation rather than casting manufacture. Biswas argued against the stay application, citing financial hardship absence and previous decisions against the applicants.The Tribunal deliberated on the contentious issues raised, considering various Supreme Court and Tribunal decisions. It noted a Special Bench decision regarding exemption for materials used in manufacturing processes akin to the present case. Additionally, a recent North Regional Bench decision favored modvat credit for chemicals used in sand mould production for final products, adding to the conflicting precedents.Considering the conflicting views on modvat credit for chemicals in sand mould production, the Tribunal found a prima facie case in favor of the applicants. Thus, it granted a stay subject to the execution of a personal bond for the disputed amount, scheduling the appeal for a future hearing.
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