2007 (1) TMI 473 - AT - Central Excise

Summary

Issues involved: Whether Modvat credit is available for plastic crates used in handling material in the factory of manufacture.

Summary:
The common issue in these appeals is the entitlement of Modvat credit for plastic crates used in handling material in the factory of manufacture. The Commissioner (Appeals) allowed the credit, but the Revenue appealed, arguing that the plastic crates do not directly or indirectly participate in the manufacture of goods. The respondents cited a Supreme Court decision in favor of manufacturers regarding similar items like bins and trolleys used within the factory for the final product. The Supreme Court held that such items are entitled to the benefit of exemption if they are used within the factory in the manufacture of final products. The Tribunal agreed with this interpretation, emphasizing the distinction between phrases used for producing or processing goods and bringing about changes in substances. As the plastic crates were found to meet the criteria for exemption under the Notification, the appeals were dismissed.