1996 (4) TMI 200 - AT - Central Excise

Summary

Issues:
Availment of Modvat Credit for Polythene film as packing material under Rule 57A of Central Excise Rules, 1944.

Detailed Analysis:
The appeal was filed by M/s. Aqueous Vietuals Limited, Bareilly, regarding the availment of Modvat Credit for Polythene film as packing material under Rule 57A of the Central Excise Rules, 1944. The Assistant Collector of Central Excise found that the Polythene film declared as input was not within the purview of Rule 57A. The appellant argued that the Polythene film was used to cover 12 bottles of aerated water in a take-away pack, not as a take-away pack itself, citing relevant case laws and a trade notice supporting their claim. The Respondent contended that the Polythene film was used after manufacturing the goods and was not used for packing excisable goods at the time of entry in the RG-I Register. The Respondent argued that the Polythene film was for transport of take-away packs, not for packing excisable goods initially.

The Tribunal analyzed Rule 57A of the Central Excise Rules, which defines inputs as those used in or in relation to the manufacture of final products. It was clarified that inputs include materials manufactured within the factory of production or in relation to the manufacture of final products, excluding certain painting and packaging materials. The Tribunal noted that the aerated water bottles were fully manufactured before being placed in the take-away tray, with Tribunal decisions establishing that the crate is not considered packing material for aerated water. The Tribunal concluded that the Polythene film used to cover the 12-bottle take-away pack could not be considered packing material under Rule 57A, as it was not an essential part of the packing for the aerated water bottles.

The Assistant Collector and the Collector (Appeals) both observed that the aerated waters could be sold in glass bottles without the Polythene film packing. Based on the facts and considerations, the Tribunal found no fault in the impugned order and dismissed the appeal filed by M/s. Aqueous Vietuals Limited, Bareilly.

In conclusion, the Tribunal upheld the decision that the Polythene film used for covering the 12-bottle take-away pack was not eligible for Modvat Credit under Rule 57A of the Central Excise Rules, as it did not qualify as essential packing material for the aerated water bottles manufactured by M/s. Aqueous Vietuals Limited.