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of <h1>Tribunal Decision on Modvat Credit Eligibility for Various Chemicals and Materials</h1> The Tribunal decided that Freon Solvent/Freon T.F. Solvent's eligibility for Modvat credit did not need a ruling. Stropping paste Aluminium Oxide ... Modvat credit Issues Involved:1. Eligibility of Freon Solvent/Freon T.F. Solvent for Modvat credit.2. Eligibility of Stropping paste Aluminium Oxide Polishing Powder for Modvat credit.3. Eligibility of Trichloroethylene for Modvat credit.4. Eligibility of Teflon Coated Glass Cloth for Modvat credit.Detailed Analysis:1. Eligibility of Freon Solvent/Freon T.F. Solvent for Modvat Credit:The Department argued that Freon Solvent/Freon T.F. Solvent should not be eligible for Modvat credit. However, the respondent contended that Freon Solvent is an anti-rust or anti-corrosion preparation used in the manufacture of blades. The initial judgment by the Vice President held that Freon Solvent is an input having regard to its functional use in relation to the end product. However, the Member (T) observed that the Assistant Collector had unauthorisedly included the plea regarding Freon Solvent in the appeal. Consequently, it was decided that the Tribunal need not pronounce on the admissibility of Modvat credit for Freon Solvent/Freon T.F. Solvent.2. Eligibility of Stropping Paste Aluminium Oxide Polishing Powder for Modvat Credit:The Department contended that Stropping paste, being an aid for polishing, should not be eligible for Modvat credit. The respondent argued that Stropping paste is used for polishing and sharpening the blade, which is essential for the product's marketability. The Vice President agreed, stating that Stropping paste is necessary to bring about the desired finishing on the blades, impacting the quality of the blades produced. The Member (T) concurred, noting that the use of Stropping paste has a bearing on the quality of the blades and is not excluded from the Modvat Scheme. Therefore, it was concluded that Stropping paste qualifies for Modvat credit.3. Eligibility of Trichloroethylene for Modvat Credit:The Department argued that Trichloroethylene, used for cleaning the lids of canisters, is not an input for Modvat credit. The respondent contended that Trichloroethylene is used to ensure the blades remain 100% free from dust or impurities, preventing rust and maintaining quality. The Vice President initially held that Trichloroethylene is an input due to its functional use in relation to the end product. However, the Member (T) disagreed, stating that Trichloroethylene is used for maintenance of equipment rather than in the manufacturing process. The third Member (J) ultimately concurred with the Vice President, citing Supreme Court rulings that anything required to make goods marketable must form part of the manufacture and that inputs used in the integrated process of manufacture should be treated as raw materials. Therefore, Trichloroethylene was deemed eligible for Modvat credit.4. Eligibility of Teflon Coated Glass Cloth for Modvat Credit:The Department argued that Teflon Coated Glass Cloth, used to get smooth surfaces and scratch-free blades, should not be eligible for Modvat credit. The respondent claimed it is essential to prevent distortion and impart a scratch-free surface finish during the manufacturing process. The Vice President, however, did not consider Teflon Coated Glass Cloth as an input. The Member (T) agreed, noting that its use is more in the nature of making the machinery functional rather than being an input in the manufacturing process. Therefore, it was concluded that Teflon Coated Glass Cloth does not qualify for Modvat credit.Final Judgment:The majority decision concluded that:- Freon Solvent/Freon T.F. Solvent's eligibility for Modvat credit need not be decided by the Tribunal.- Stropping paste Aluminium Oxide Polishing Powder is eligible for Modvat credit.- Trichloroethylene is eligible for Modvat credit.- Teflon Coated Glass Cloth is not eligible for Modvat credit.
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