Modvat credit for wire mesh and felts upheld as eligible inputs used in paper manufacture.

Wire mesh and felts were treated as eligible inputs for Modvat credit under Rule 57A because they were used in or in relation to the manufacture of paper and paper boards and did not fall within the exclusion clause in the explanation to the rule. The Tribunal followed its earlier decision in the assessee's own case and the Larger Bench view on the same question, and concluded that credit was admissible.

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Issues: Whether wire mesh and felts are eligible inputs for Modvat credit under Rule 57A.

Analysis: The issue had already been covered by the Tribunal in the assessee's own case, following the Larger Bench decision on the same point. The inputs were found to be used in or in relation to the manufacture of paper and paper boards, and were not excluded by the relevant exclusion clause in the explanation to Rule 57A.

Conclusion: Wire mesh and felts were held eligible inputs, and Modvat credit was admissible to the assessee.

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