1998 (10) TMI 133 - AT - Central Excise

Summary

Issues:
Claim for credit of duty paid on a printing machine as capital goods under Rule 57Q.

Analysis:
The case involved the appellant, a manufacturer of lubricating oils, seeking credit of duty paid on a printing machine used to print details like batch number, date of manufacture, and maximum retail price on plastic containers. The Assistant Commissioner initially accepted the contention that printing on containers was part of the manufacturing process and dropped the demand. However, the jurisdictional Commissioner disagreed, claiming the machine did not qualify under Rule 57Q. The Collector (Appeals) set aside the Assistant Commissioner's order, stating that the machine did not qualify as capital goods as it did not bring about any change in the substance for the final product.

The appellant emphasized that the marketability of the lubricating oils depended on the containers displaying required details. Referring to a Supreme Court decision, it was argued that every process leading to the final manufacturing of goods should be considered a process under Rule 57Q. On the other hand, the Respondent argued that printing on containers did not constitute manufacturing containers and that the printing machine did not fall under the specific Chapter heading in the Explanation. Additionally, it was noted that the assessee manufactured lubricating oil, not containers.

The Tribunal considered the submissions and held that the printing process was integral to the manufacture of lubricating oil. It was noted that the goods could not be marketable without the printed details on the containers, making printing a crucial part of the manufacturing process. Referring to Rule 51, which mandates marking certain details on containers, the Tribunal concluded that the printing process contributed to the marketability of the product and thus qualified as a manufacturing process. As the law included packing costs in the assessable value of goods, denying the printing process as part of manufacturing would be incongruous. Consequently, the Tribunal allowed the appeal, declaring the printing machine as eligible capital goods and providing consequential relief to the appellant.