1996 (10) TMI 284 - AT - Central Excise

Summary

Issues: Modvat credit denial on disposable syringes and needles packed with medicines, classification of syringes and needles as packing material or input for manufacture.

The judgment by the Appellate Tribunal CEGAT, New Delhi involved an appeal against the denial of Modvat credit on disposable syringes and needles packed with medicines falling under sub-heading 3003.10 of the Central Excise Tariff Act, 1985. The appellants, engaged in manufacturing medicines, specifically Metadec 25 nandrolone decanoate injections B.P., argued that the process of putting the injection along with the disposable syringe and needle in blister packing constituted manufacture as per Note 5 to Chapter 30 of the Act. They claimed these items as inputs used in or in relation to the manufacture of their final product. The appellants cited a previous Tribunal judgment allowing Modvat credit on droppers supplied with pediatric drops, emphasizing that denial of credit would lead to unfair competition among manufacturers. The Tribunal noted that the syringe and needle, when packed with the medicine in ampoules, did not qualify as packing material or an input for the final product. The syringe and needle were deemed independently marketable items, not functionally designed as complementary gifts but as detachable components supplied separately. Consequently, the appeal was dismissed, upholding the denial of Modvat credit on the disposable syringes and needles packed with the medicines.

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