Modvat credit on BOPP films used as a separating medium was allowed; they were not excluded appliances under Rule 57A.

Plastic BOPP films used as a separating medium in the lamination process were treated as inputs used in or in relation to the manufacture of decorative laminated sheets, so Modvat credit was available. Mere repeated use did not convert the films into appliances, apparatus or instruments, and the fact that they did not form an integral part of the final product did not take them outside Rule 57A. As the inputs and final products were covered by the Modvat notification and the films were not within the excluded categories, credit could not be denied on that basis.

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Issues: Whether plastic BOPP films used as a separating medium in the manufacture of decorative laminated sheets were eligible for Modvat credit, or were excluded as appliances, apparatus or instruments under Rule 57A of the Central Excise Rules.

Analysis: The films were used directly in the product mix and only functioned as a separating medium in the lamination process. Mere repeated use did not convert a film into an appliance, apparatus or tool, nor did the fact that it did not form an integral part of the final product take it outside the expression "inputs used in or in relation to the manufacture of the final product". Since the inputs and final products were covered by the Modvat notification and the films did not fall within the excluded categories in the explanation to Rule 57A, credit could not be denied on the ground that they were appliances.

Conclusion: Plastic BOPP films used as a separating medium were entitled to Modvat credit and were not excluded by the explanation to Rule 57A.

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