Modvat credit on caustic soda used in the manufacture of sodium sulphate - Central Excise - 24/90-CX.8

Modvat credit on caustic soda used in the manufacture of sodium sulphate Circular No. 24/90-CX.8 Dated 11-4-1990 [From F.No. 264/13/89-CX.8] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs New Delhi Subject : Admissibility of Modvat credit on Caustic Soda used in the manufacture of Sodium Sulphate - Regarding. I am directed to refer to the minutes on Point No. 3 of the North Zone Tariff-cum-General Conference held at Chandigarh on 18th 19th September, 1989. Doubts have arisen whether the credit of duty paid on inputs used in the manufacture of viscose staple fibre namely Sodium Hydroxide and Sulphuric Acid can be utilised towards payment of duty on the by-product namely, Sodium Sulphate. During the process of manufacture, cellulose is treated with caustic soda for converting the same into Alkali Cellulose Xanthate by treating the same by carbondioxide. Later cellulose Xanthate which is dissolved in dilute alklai solution is treated with Sulphuric Acid which regenerates Cellulose. During the coagulating process, Sodium Hydroxide and Sulphuric Acid react to form Sodium Sulphate as a by-product. The matter has been examined by the Board. It is seen that Sodium Hydroxide and sulphuric acid react to form sodium sulphate which is a by-product in the manufacture of viscoses staple fibre. Rule 37A does not deny MODVAT credit to final products on the ground that they are in the nature of duty paid on caustic soda and sulphuric acid used in the manufacture of viscose staple fibre could be utilised towards the payment of duty on sodium sulphate which is obtained as a by-product since both inputs as well as output (by product) has been specified under Notification issued under Rule 57A. All pending assessments may be finalised on the-basis of these instructions. Field formations and trade should also be suitably advised. Receipt of these instructions may please be acknowledged.