1999 (7) TMI 174 - AT - Central Excise

Appellate Tribunal grants duty exemption on sand-mix for steel castings

The Appellate Tribunal held that the sand-mix used in producing sand-moulds for steel castings qualifies for benefits under Notification No. 217/86-C.E. ... Benefit of Notification No. 217/86-C.E. would be available to the sand mixture so used. Issues:Whether duty is payable on sand-mixture used in the manufacture of sand-moulds subsequently used in steel casting; Applicability of Notification No. 217/86-C.E. exempting captively consumed goods.Analysis:The appeals before the Appellate Tribunal CEGAT, CALCUTTA involved the question of whether duty is leviable on sand-mixture utilized in producing sand-moulds, which are then employed in the manufacturing process of steel castings. The Revenue contended that duty is applicable on the sand-mix as the moulds are exempted under Notification No. 381/76, thus exempting them from the provisions of Notification No. 217/86-C.E. The appellants argued that since the sand-moulds are further utilized in the production of castings cleared upon payment of duty, the sand-mixture should be considered as used in the manufacture of final products, making them eligible for the benefits under Notification No. 217/86.In support of their position, the appellant company, M/s. Hindusthan Malleables & Forging Limited, relied on the precedent set by the case of TELCO v. Collector of Central Excise, where it was established that sand-mix utilized in the production of sand-moulds for steel castings should be deemed as used in the casting manufacturing process, entitling them to the benefits of Notification No. 217/86. They also referenced the decision in the case of Shri Ramakrishna Steel Industries Ltd., reinforcing their argument.The Respondent, represented by Shri R.K. Roy, opposed the appellant's stance, emphasizing that the sand-mix is used in mould production, not casting manufacturing. Despite the Tribunal's decision in TELCO's case, the Respondent contended that the benefits of Notification No. 217/86 should not extend to the appellants. Reference was made to the Tribunal's ruling in the case of Mukund Iron and Steel Works Ltd. v. Collector of Central Excise to support this position.The Tribunal, after considering the arguments from both sides, concurred with the appellant's contentions. Citing the precedent set in the TELCO case, it was established that the sand-mix used in creating sand-moulds for steel castings qualifies for the benefits under Notification No. 217/86. Consequently, the impugned order was set aside, and both appeals were allowed in favor of the appellants, granting them consequential reliefs as well.