Modvat credit for catalysts and resins used in sand moulds was upheld as input eligibility for steel castings.

Chemicals, including catalysts, and resins used in preparing sand moulds for manufacture of steel castings qualify as inputs for Modvat credit, particularly where the sand moulds themselves are not goods. The Tribunal relied on the view that resins were covered by the Larger Bench ruling on chemicals and resins used in sand moulds, and treated catalysts as chemical inputs for the same purpose. On that basis, Modvat credit on catalysts and resins was held admissible, and the disallowance was set aside.

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Issues: Whether Modvat credit was admissible on catalysts and resins used in the preparation of sand moulds for manufacture of steel castings.

Analysis: The appeal was confined to the dispute regarding credit on catalysts and resins. The Tribunal noted that catalyst is a chemical and that resins were specifically covered by the cited Larger Bench decision holding chemicals and resins used in sand moulds to be inputs in the manufacture of steel castings. It was also observed that sand moulds are not goods.

Conclusion: Modvat credit on catalysts and resins was held admissible.

Final Conclusion: The disallowance of Modvat credit was set aside and the appellant was granted the resulting relief in accordance with law.

Ratio Decidendi: Chemicals, including catalysts, and resins used in sand moulds for manufacturing steel castings qualify as inputs for Modvat credit where the moulds themselves are not goods.

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