ORDER
Shiben K. Dhar, Member (T)
1. This Reference Application by Collector of Central Excise, Chandigarh seeks reference on the following question of law for authoritative opinion of the Hon’ble High Court :-
“Whether Foundry Fluxes and other chemicals used for manufacture of valves and corks are eligible of Modvat credit.”
Tribunal in its order No. A/61 /94-NRB in case of CCE, Chandigarh v. Leader Engineering Works held that Foundry fluxes used in valves moulds which subsequently was used up during manufacture of finished products are eligible inputs for the purpose of availing modvat credit.
2. Revenue relied upon the cases of W.S. Industries (India) Ltd. v. CCE 1991 (56) E.L.T. 267 (Tribunal), Mysore Kirloskar Ltd. v. CCE 1990 (50) E.L.T. 175 (Tri) and Shivaji Works Ltd. v. CCE 1990 (50) E.L.T. 50 (Tri).
3. Ld. DR submitted that the Foundry fluxes and chemicals are used in the manufacture of moulds which by themselves are tools. The functions of these tools is to hold molten metal. These moulds get broken when they are allowed to cool down, the cast bodies and parts are taken out. The Tribunal was therefore not correct in holding that these are eligible inputs for the purpose of Modvat on finished product like moulds and cores.
4. Ld. Laison Officer Shri Dhillon on behalf of the appellants submitted that in their own case no reference application was filed on the other occasion even though the amount of duty was much more than the present case. He submitted that basic question is whether these moulds are actually goods. These moulds can be considered only as intermediate stage in the manufacture of valves and corks and the moulds themselves are not marketable as such. The foundry fluxes being used for manufacture of Sand Moulds and corks is eligible for the benefit of Modvat credit. He cited the cases reported in 1993 (63) E.L.T. 867 and 1993 (63) E.L.T. 723 where eligibility to Modvat credit on such inputs has been upheld. Referring the case of CCE v. Famous Cine Laboratory reported in 1993 (66) E.L.T. 253, Ld. representative of the respondent submitted that Tribunal held unless the goods are marketable they cannot be held to be excisable and that a solution prepared is entirely used in continuous process which has short shelf life, cannot be sent to market for sale, cannot be held to be goods.
5. Considered. In case of C.C.E. v. Leader Engineering Works 1993 (63) E.L.T. 687 (Tri), itself Tribunal held on early occasion that sand core and sand moulds got destroyed during use and are neither sold nor are saleable in the market and there is nothing in the Modvat Scheme which would bar benefit on such inputs as are indirectly used in the production of final output. Again in the case of Hindustan Motors Ltd. v. CCE 1993 (63) E.L.T. 723, Tribunal held that an article to be classified as equipment must qualify first as goods. It held that Sand Moulds being unstable and breakable, with no Shelf life, are not marketable product and hence not the goods and therefore cannot be considered as equipment. In such circumstances resins have to be treated as used in or in relation to manufacture of cores and credit is admissible. In this case, the Tribunal followed the precedent decision in the case of Leader Engineering case 1993 (63) E.L.T. 687 (Tri.) and held that they were departing from decisions of West and South Regional Benches as such decisions appear to have been passed sub-silentio since the arguments advanced before East Regional Bench were not canvassed before West Regional Bench and South Regional Bench.
6. Following the ratio of this judgment I am of the view that legal position in law as regards the marketability and other factors such as have been taken into consideration is already settled and therefore no question of law meriting to reference to the Hon’ble High Court arises out of the Tribunal’s Order No. A/61/94-NRB. The Reference Application is therefore, dismissed.