2005 (12) TMI 341 - AT - Central Excise

Summary

Issues: Denial of Modvat credit on Plastic Crates as inputs under Rule 57A of Central Excise Rules, 1944.

The judgment delivered by the Appellate Tribunal CESTAT, Kolkata, involved the issue of denial of Modvat credit on Plastic Crates as inputs under Rule 57A of the Central Excise Rules, 1944. The appellant company, engaged in the manufacture of P.P. Caps, claimed Modvat credit on the Plastic Crates used in the manufacturing process from June 1999 to December 1999. The appellant argued that the Plastic Crates were inputs related to the manufacture of final goods.

During the hearing, the JDR for the Revenue pointed out that the inputs used in the manufacture of finished excisable goods during the material period were not covered under Rule 57A. The Commissioner (Appeals) had previously held that the items, including Plastic Crates, were used for transporting P.P. Caps, whether finished or semi-finished, and were not eligible for Modvat credit under Rule 57A.

The Tribunal analyzed the definition of 'input' under Rule 57A of the Central Excise Rules, 1944, and noted that after the 1977 changes to the Modvat Rules, only inputs directly related to the manufacture of finished excisable goods were covered under Rule 57A. The eligibility criteria for certain classes of inputs in relation to the manufacture of finished goods were outlined separately in Rule 57B. The Tribunal observed that Plastic Crates were used solely in relation to the manufacture of final products, but Rule 57B explicitly denied Modvat credit to packing materials or containers not included in the value of the final products.

The Tribunal emphasized that the value of the Plastic Crates in question was not included in the assessable value of the P.P. Caps, which rendered the Plastic Crates ineligible for Modvat credit as inputs. Consequently, the appeal filed by the appellant company was rejected by the Tribunal. The judgment was pronounced in open court by the presiding judge, Shri V.K. Jain.

---