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of <h1>Appeal Denied: Foundry Chemicals Ineligible for Modvat Credit</h1> <h3>KG. KHOSLA COMPRESSORS Versus COLLECTOR OF C. EX., NEW DELHI</h3> KG. KHOSLA COMPRESSORS Versus COLLECTOR OF C. EX., NEW DELHI - 1998 (101) E.L.T. 474 (Tribunal) Issues:1. Eligibility of Foundry Chemicals for Modvat Credit2. Utilization of Modvat Credit for duty on castingsEligibility of Foundry Chemicals for Modvat Credit:The appeal questioned whether Foundry Chemicals used in sand moulds and cores were eligible for Modvat Credit. The appellant argued that the chemicals used in sand mould preparation were inputs and eligible for credit under the Modvat scheme. The appellant cited precedents like Hindustan Motors Ltd. v. CCE and CCE v. Leader Engg. Works to support their claim. However, the Jt. CDR contended that sand moulds were not eligible for Modvat Credit, hence the chemicals used in their preparation could not be considered eligible inputs. The Tribunal referred to the case of Mysore Kirloskar Ltd. v. CCE, where it was held that sand moulds were not treatable as intermediate products and not eligible for Modvat Credit under Rule 57D. The Tribunal further clarified that sand moulds were tools or apparatus used in casting manufacture, not eligible for Modvat credit under Rule 57A. Therefore, the Tribunal dismissed the appeal based on established precedents and lack of merit in the appellant's argument.Utilization of Modvat Credit for duty on castings:The appellant sought to utilize Modvat Credit for the duty on castings, arguing that the chemicals used in sand mould preparation should be considered inputs in the casting manufacture process. However, the Tribunal referenced the case of Shivaji Works Ltd. v. CCE, where it was held that Modvat credit was not available on equipment like sand moulds, which were considered apparatus for castings. The Tribunal emphasized that inputs used in sand moulds, being equipment for castings, were not entitled to Modvat credit for duty on the final product, castings. The Tribunal found no merit in the appeal, citing direct precedents and dismissing the case based on identical facts presented in previous decisions. Consequently, the appeal was dismissed, and the case laws cited by the appellant were deemed unhelpful due to the similarity of facts with previous cases.
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