Modvat credit on casting sleeves allowed where they functioned as replaceable mould fittings, not excluded machinery parts.

Sleeves used in the manufacture of castings were treated as eligible inputs for Modvat credit because they functioned as mould fittings and had to be replaced after each heat. The exclusion for machines, machinery and similar items under Rule 57A did not extend to parts of such machinery, and the sleeves were regarded as binding accessories rather than excluded equipment. Credit was therefore allowable and the disallowance was set aside.

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Issues: Whether sleeves used in the manufacture of castings are eligible inputs for Modvat credit under Rule 57A of the Central Excise Rules, 1944.

Analysis: Sleeves were used in the moulds as fittings and were required to be replaced after each heat. The exclusion under Rule 57A applies to machines, machinery and the like, but not to parts of such machinery. The Tribunal also treated binding accessories as eligible for Modvat credit, and the sleeves in question were found to be of that nature in the manufacture of castings.

Conclusion: Sleeves are eligible inputs for Modvat credit under Rule 57A of the Central Excise Rules, 1944, and the disallowance was set aside.

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