Modvat credit for mould-release lubricant allowed where the input facilitated smooth removal of glass products in manufacture.

Lubricating oil/Kleen Mold-170 applied on mould surfaces was treated as an input used in or in relation to manufacture for Modvat credit under Rule 57A. Because it formed a film that enabled the glass article to detach easily without damage, it facilitated the manufacturing process and participated in production of the final goods. On that basis, the Tribunal applied its earlier view on functional use in manufacture and held that the credit claim was admissible, so the denial was unsustainable.

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Issues: Whether lubricating oil / Kleen Mold-170 used on the mold surface qualified as an input for Modvat credit under Rule 57A.

Analysis: The material was used to create a film on the mold surface so that the glass article could be detached easily and without damage. It facilitated the manufacturing process by enabling smooth removal of the finished product and participated in the production of the final goods. The Tribunal also relied on its earlier view that such use satisfied the requirement of use in or in relation to manufacture.

Conclusion: The input was eligible for Modvat credit and the denial was unsustainable.

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