TMI Blog1991 (4) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... aris is untenable since the latter is used only in the manufacture of moulds which, in turn, are used captively for the manufacture of sanitaryware. The moulds are in the nature of equipment/apparatus/tools which are, themselves, final products falling under Heading No. 6807.00 of the Schedule. Plaster of paris is the input for moulds, not sanitaryware. Hence the benefit of Notification No. 217/86 is not admissible to plaster of paris so used since moulds are exempt from excise duty under Notification No. 221/86, as amended by Notification No. 89/89. It is this order that is challenged in the present appeal. 2. We have heard Shri B. D. Ahmed, Advocate, for the appellant and Shri L. Narasimha Murthy, DR, for the respondent - Collector. 3. On 28-8-1989, the Assistant Collector issued a demand-cum-show cause notice for a sum of Rs. 1,95,675.75 for the period from March 1989 to July 1989. Cause was to be shown to the Assistant Collector. By a corrigendum dated 19-3-1990, issued by the Assistant Collector, cause was required to be shown to the Collector instead of the Assistant Collector. By another corrigendum dated 5-4-1990, the following words were added to para 4 of the notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to the Department, plaster of paris moulds was the final product. And, since such moulds were exempted from duty in terms of Notification 221/86, the exemption in terms of Notification 217/86 was not admissible by virtue of the proviso referred to earlier. In this context, reliance was placed on the Tribunal s decision in Gujarat Alkalies Chemicals Ltd. v. Collector of Central Excise - 1989 (41) E.L.T. 424. The question considered therein was whether Titanium Metal Anodes could be considered as an input for the purpose of Central Excise Rule 57A. The Tribunal noted that anodes could not be considered to fall in the excluded category of machines, machinery, plants, equipments, apparatus, tools and appliances. After considering the matter at length, the Tribunal held that the benefit of the said rule would be available in the case of Titanium Metal Anodes. Reliance was also placed on the Tribunal s decision in Union Carbide (I) Ltd. v. Collector of Central Excise - 1989 (43) E.L.T. 286 (Paras 10 and 11), In that decision, it was held that to be an input, a material must be used and consumed in the process of manufacture of the finished product. It is not necessary for the input o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit in terms of Central Excise Rule 57A. Before the Tribunal, the assessee contended that sand moulds should be taken as intermediate goods and though they were exempt from duty, the benefit of Modvat credit in terms of Central Excise Rule 57D was available. The Tribunal held that sand moulds manufactured by the assessee for use in the manufacture of castings, were in the nature of tools or apparatus, and did not qualify as intermediate goods. The use of the inputs in the manufacture of sand moulds was held to be not use in or in relation to the manufacture of castings and the assessee was held as not eligible for the benefit of Rule 57D, as moulds did not qualify as intermediate goods. Shri Murthy also contended that the decision in the case of Gujarat Alkalies Chemicals Ltd. (supra) was not applicable to the present case since plaster of paris moulds were not similar to the goods in that case. 8. In his rejoinder, the learned Counsel submitted that the question was not whether plaster of paris was eligible for exemption when used in the production of moulds but whether it was eligible for exemption when used in the manufacture of sanitaryware. In the Mysore Kirloskar case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Schedule (under which plaster of paris moulds falls) and Chapter 69 of the Schedule (ceramic products fall under this Chapter). In the present case, plaster of paris has been used in the manufacture of plaster of paris moulds which, in turn, have been used in relation to the manufacture of ceramic products. In the process of manufacture employed by the appellants, plaster of paris moulds are not the final product. They are not cleared outside the factory. If they are cleared outside the factory, only then would the question whether they are to be treated as final products for the purpose of Notification 217/86 arise. The appellants contention that plaster of paris moulds are not goods for the purpose of excise levy would also then need be considered. Such, however, is not the case in the present instance. Even presuming that plaster of paris moulds are goods falling under Chapter 68 of the Schedule, we do not see any reason why the benefit of Notification 217/86 cannot be extended to plaster of paris used in the manufacture of plaster of paris moulds which are used in relation to the manufacture of ceramic products. In our view, the first proviso to the notification (extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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