Modvat credit on catalyst input denied where Vanadium Pentoxide was used for Sulphuric Acid, not Zinc manufacture.

Vanadium Pentoxide was held not to qualify as an eligible Modvat input for manufacture of Zinc because the record showed it functioned as a catalyst in Sulphuric Acid manufacture and in pollution control, not in the production of Zinc. Credit was available only where the input was used in or in relation to the manufacture of the final product for which credit was claimed. As the claimed nexus with Zinc was not established, the credit was inadmissible and recovery was upheld.

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Issues: Whether Vanadium Pentoxide qualified as an eligible input for Modvat credit in relation to the manufacture of Zinc.

Analysis: Vanadium Pentoxide was declared as a catalyst for the manufacture of Sulphuric Acid, and the material on record showed that it functioned in that process and in pollution control, not in the manufacture of Zinc. Credit could be allowed only where the input was used in or in relation to the manufacture of the final product for which the credit was claimed. As Sulphuric Acid was not an input for Zinc in the relevant sense, the availed credit was not admissible.

Conclusion: The credit on Vanadium Pentoxide was inadmissible, and the demand for recovery was sustained.

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