Modvat credit for caustic soda lye allowed where tariff description covered the same chemical substance in another form.

Caustic soda lye was treated as covered by the declared input description "caustic soda" for Modvat credit under Rule 57G because the tariff entry for sodium hydroxide (caustic soda) was read as encompassing both anhydrous sodium hydroxide and its aqueous solution. The chemical identity relied upon showed caustic soda and caustic soda lye to be the same substance in different forms, so credit could not be denied on a mere difference in nomenclature. The denial of Modvat credit was therefore set aside, and the assessee was entitled to the benefit.

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Issues: Whether caustic soda lye is covered by the expression caustic soda for the purpose of Modvat credit under Rule 57G.

Analysis: The inputs declared under Rule 57G were described as caustic soda classifiable under Chapter 28 of the tariff. The dispute arose because the department treated the goods received as caustic soda lye and not caustic soda. The description in the tariff entry, sodium hydroxide (caustic soda), was read as covering both anhydrous sodium hydroxide and its aqueous solution. The chemical reference relied upon showed caustic soda and lye as referring to sodium hydroxide, so the material received was not different in substance from the declared input.

Conclusion: Caustic soda lye was held to fall within caustic soda, and the assessee was entitled to Modvat credit.

Final Conclusion: The denial of credit was set aside and the appeal succeeded.

Ratio Decidendi: Where the tariff description and accepted chemical identity show that two forms of the same substance are covered by the declared input, Modvat credit cannot be denied on a mere difference in nomenclature.

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