1986 (5) TMI 121 - AT - Central Excise

Summary

Issues:
- Interpretation of the term 'input' under Notification No. 201/79 for availing proforma credit on packing material.
- Whether packing containers can be considered as inputs in the manufacture of certain goods.
- Comparison with previous CEGAT decisions and their impact on the current case.
- Department's appeal against earlier decisions favoring the taxpayer.

Analysis:
The case involves a revision application against an Order-in-Appeal regarding the refusal of proforma credit on packing material for carbon and zinc elements. The dispute revolves around whether the packing containers can be classified as inputs under Notification No. 201/79. The Appellate Collector held that the goods were complete upon manufacture and that packing did not qualify as an input. The appellant argued that packing was essential for preserving the goods and cited relevant case laws in their favor.

Upon review, the Tribunal examined the scope of the term 'input' under the notification. It was noted that the Department sought to restrict the interpretation to raw materials or components used in the finished products. However, an amending notification in 1982 introduced a narrower definition of 'input.' The Tribunal referred to previous cases where packing material was considered as inputs for availing exemptions. In the case of wooden drums used in packing electric wires, it was held that they qualified as inputs under a specific notification.

The respondent acknowledged that earlier CEGAT decisions favored the taxpayers, but mentioned that the Department had appealed against those decisions. However, the Tribunal found no indication that all aspects of the issue were not thoroughly examined in the previous orders. Ultimately, the Tribunal agreed with the precedent set by previous decisions and allowed the appeal, granting relief to the appellant in line with the established interpretation of 'input' under the relevant notifications.

This judgment clarifies the interpretation of the term 'input' under Notification No. 201/79 and establishes that packing containers can be considered as inputs in certain manufacturing processes. It also highlights the significance of consistency in judicial decisions and the impact of departmental appeals on established legal principles.