Release paper used in PVC coated fabric manufacture qualifies as Modvat input, not an excluded apparatus or appliance.

Release paper used in the manufacture of PVC coated fabrics was treated as an input eligible for Modvat credit under Rule 57A because it performed a role in the transfer process and some material from it entered the product stream. It was not regarded as a mere release medium, apparatus, or appliance falling within the exclusion in the Explanation to Rule 57A. On that basis, the claim for credit was accepted in favour of the assessee.

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Issues: Whether release paper used in the manufacture of PVC coated fabrics is an input eligible for Modvat credit, or whether it is merely an apparatus or appliance falling outside the scope of Rule 57A of the Central Excise Rules.

Analysis: The release paper was examined in the context of the manufacturing process and the technical material placed before the Tribunal. The paper was found not to function merely as a release medium or appliance. It performed a role in the transfer process and some materials from it entered the product stream of the final product. On that basis, it could not be treated as an apparatus or appliance excluded by the Explanation to Rule 57A.

Conclusion: The release paper was held to be an input eligible for Modvat credit and not an apparatus or appliance. The issue was decided in favour of the assessee.

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