1996 (4) TMI 258 - AT - Central Excise

Summary

Issues: Modvat credit eligibility for release paper used in manufacturing coated leather fabrics.

The judgment pertains to an appeal by the Commissioner of Central Excise, New Delhi against an Order-in-Appeal allowing Modvat credit for release paper used in manufacturing coated leather fabrics. The appellant argued that the release paper acts as a carrier/conveyor belt of plastisol onto fabric, making it ineligible for Modvat credit under the exclusion clause in the definition of input under Rule 57A. The respondents did not appear during the proceedings. The Tribunal noted that the release paper's function of transferring material to the fabric for design purposes does not classify it as a conveyor belt. The Tribunal referenced a previous decision where it was held that release paper, while acting as a releasing agent, also transfers material to the final product, making it eligible for Modvat credit. The Tribunal cited cases involving air bags and bladders used in tire manufacturing, where similar items were deemed eligible for Modvat credit despite being capable of repeated use. The Tribunal dismissed the appeal, citing precedents and holding that the release paper qualifies for Modvat credit based on its function and usage, in line with previous decisions and Supreme Court rulings.