Modvat credit for electrodes affirmed as inputs, allowing duty credit where electrodes serve as consumable manufacturing inputs. Clarification that Modvat credit is permissible for graphite and carbon electrodes used as consumable inputs in electric arc furnaces and aluminium manufacture because they satisfy the Modvat Rules' criterion of input. The circular rejects treating such electrodes as 'machine' items under Section XVI Note 5 beyond the limited context of Notes 1-4, and confirms eligibility for credit even if electrodes partly or wholly form part of finished products; the same approach applies to other manufacturing electrodes.
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Modvat credit for electrodes affirmed as inputs, allowing duty credit where electrodes serve as consumable manufacturing inputs.
Clarification that Modvat credit is permissible for graphite and carbon electrodes used as consumable inputs in electric arc furnaces and aluminium manufacture because they satisfy the Modvat Rules' criterion of input. The circular rejects treating such electrodes as "machine" items under Section XVI Note 5 beyond the limited context of Notes 1-4, and confirms eligibility for credit even if electrodes partly or wholly form part of finished products; the same approach applies to other manufacturing electrodes.
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