Modvat credit on imported goods sustained where product identity matched despite nomenclature dispute over polyphenylene compounds.

Modvat credit on imported goods was considered admissible where the department objected that polyphenylene ether and polyphenylene oxide were different from the product declared under Rule 57G. Product identity was tested against HSN explanatory notes, technical dictionaries and a chemist's report, which indicated that polyphenylene ether is a group of products and polyphenylene oxide is an important member of that group. Customs classification under Heading 3909.30 also supported treatment of the goods as the same commodity for excise purposes. In the absence of any contrary basis for a different classification, credit could not be denied merely because of the department's objection to nomenclature.

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Issues: Whether Modvat credit was admissible on the imported goods when the department disputed that polyphenylene ether and polyphenylene oxide were different from the product declared under Rule 57G.

Analysis: The product identity was examined with reference to the HSN explanatory notes, technical dictionaries, and the chemist's report. The materials showed that polyphenylene ether is a group of products of which polyphenylene oxide is an important member, and the customs classification of the goods under Heading 3909.30 supported the view that the product was the same commodity for excise purposes. In the absence of any contrary basis for treating the product differently, the credit could not be denied merely on the department's objection to nomenclature.

Conclusion: The credit was rightly taken and the denial of Modvat credit was unsustainable.

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