Modvat credit denied for Triethylene Glycol used only to clean and maintain plant filters, not in manufacturing process.

Rule 57A of the Central Excise Rules, 1944 allows Modvat credit only for inputs used in or in relation to manufacture of the final product. Triethylene Glycol used solely to clean and maintain filters in the plant was not part of the manufacturing process of polyester chips and therefore fell outside the eligible input category. The trade notice relied on also treated maintenance inputs as ineligible. Modvat credit was accordingly not available on Triethylene Glycol, and the claim was disallowed.

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Issues: Whether Triethylene Glycol used for cleaning the filters installed in the plant for filtering liquid polymer was an eligible input for Modvat credit as being used in or in relation to the manufacture of polyester chips.

Analysis: Rule 57A of the Central Excise Rules, 1944 permits credit only on inputs used in or in relation to the manufacture of the final product. The material on record showed that Triethylene Glycol was used only for cleaning and maintaining the filters used in the plant, and not as a constituent of the manufacturing process of polyester chips. The trade notice relied upon also treated inputs used for maintenance of plant and machinery as ineligible, bringing the disputed item within the exclusion.

Conclusion: Triethylene Glycol was not an eligible input for Modvat credit and the claim was rightly disallowed.

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