Release paper qualifies as an eligible manufacturing input, allowing Modvat credit for coated fabrics and floor coverings.

Release paper used in the manufacture of PVC coated fabrics and vinyl floor coverings was treated as an input used in or in relation to manufacture, not as an apparatus or instrument. Following earlier Tribunal decisions on transfer of plastisol and lamination processes, the material was regarded as necessary for obtaining the finished product. Modvat credit under Rule 57A was therefore admissible, and the Revenue's challenge failed.

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Issues: Whether release paper used in the manufacture of PVC coated fabrics and vinyl floor coverings was an admissible input for Modvat credit under Rule 57A of the Central Excise Rules, 1944.

Analysis: The Tribunal followed its earlier decisions holding that release paper used for transfer of plastisol on fabric, and in the lamination process for textile fabrics and artificial leather cloth, was a necessary material for obtaining the final product. It was treated as an input used in or in relation to the manufacture of the finished goods and not as an apparatus or instrument. On that reasoning, Modvat credit was held admissible.

Conclusion: The release paper was an admissible input and Modvat credit was allowable; the Revenue's challenge failed.

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