1991 (8) TMI 223 - AT - Central Excise

Summary

Issues:
- Appeal against the order regarding the eligibility of modvat credit for duty paid on release paper used in manufacturing PVC coated fabrics.

Detailed Analysis:
1. The appeal was filed against an order regarding the eligibility of modvat credit for duty paid on release paper used in manufacturing PVC coated fabrics. The issue revolved around whether release paper qualifies as an input for claiming modvat credit.

2. The Assistant Collector initially ruled that release paper is not considered as an input as per the Explanation to Rule 57A of the Central Excise Rules. This decision was upheld by the Collector (Appeals), leading to the appeal before the tribunal.

3. The appellant argued that release paper, made from long staple cellulose fibers treated with a releasing agent, is not merely an appliance but transfers materials essential for the final product. They presented a technical write-up supporting their claim and cited a favorable decision by the North Regional Bench in a similar case.

4. On the other hand, the respondent contended that release paper acts as a release media, is not consumed after one use, and does not become part of the final product, thus not qualifying as a component or consumable for modvat benefit.

5. After considering both arguments, the tribunal examined the technical details provided by the appellant. It was observed that different types of release papers are crucial for the adhesion mechanism in manufacturing PVC leather cloth. The release paper not only acts as a release agent but also transfers materials necessary for the final product.

6. Based on the technical analysis and the North Regional Bench's decision, the tribunal concluded that release paper is more than just an appliance and plays a significant role in the manufacturing process by transferring essential materials. Therefore, the tribunal agreed with the North Regional Bench's decision and allowed the appeal, granting consequential relief if required.