1996 (8) TMI 273 - AT - Central Excise

Summary

Issues:
- Modvat credit denial on input Dowtherm Dephyl for nylon polyester filament yarn manufacture.

Analysis:
The case involved an appeal challenging the denial of Modvat credit on the input Dowtherm Dephyl used in the production of nylon polyester filament yarn. The lower authorities had rejected the credit, considering the input as a device for supplying heat, which they deemed ineligible under Rule 57A. The appellant argued that the use of Dowtherm Dephyl was essential for the manufacturing process, citing relevant case laws to support their claim that inputs need not be physically present in the final product but should be crucial for its emergence. The Tribunal examined the function of Dowtherm Dephyl in the manufacturing process, noting its role in maintaining heat required for the production of yarn. It concluded that Dowtherm Dephyl was indeed an essential input used in relation to the manufacture of nylon and polyester filament yarn, meeting the criteria under Rule 57A for Modvat credit eligibility. Therefore, the impugned orders denying the credit were set aside, and the appeals were allowed.

Key Points:
- Lower authorities denied Modvat credit on Dowtherm Dephyl, considering it a device for supplying heat.
- Appellant argued the essential nature of Dowtherm Dephyl in the manufacturing process, citing relevant case laws.
- Tribunal analyzed the function of Dowtherm Dephyl in maintaining heat for yarn production.
- Tribunal concluded Dowtherm Dephyl was an eligible input under Rule 57A for Modvat credit.
- Impugned orders denying credit were set aside, and appeals were allowed.