1999 (10) TMI 269 - AT - Central Excise

Summary

Issues:
- Denial of Modvat credit on 'Printing Ink' and 'Media'
- Confirmation of penalty imposed by the Asstt. Commissioner

Analysis:
1. The appeal challenged the Order-in-Appeal denying Modvat credit on 'Printing Ink' and 'Media' while confirming a penalty of Rs. 10,000 imposed by the Asstt. Commissioner. The appellants contended that previous Tribunal decisions supported their claim for Modvat credit under Rule 57A for inputs used in the manufacturing process.

2. The appellants' counsel cited relevant cases like Brooke Bond Lipton (India) Ltd. and C.C.E., Pune v. Sathe Biscuits & Chocolate Co. Ltd. to argue that materials such as 'Printing Ink' used in packaging materials were eligible for Modvat credit. The manufacturing process involving various materials like T.D.L. Poster Paper, O.L.B. paper, and printing inks was detailed to demonstrate the necessity of these inputs for labeling and packaging compliance under specific Acts.

3. The Respondent's representative referred to a previous Final Order of the Tribunal where Modvat credit was denied for 'Printing Ink'. Despite a pending reference to the Hon'ble Punjab & Haryana High Court on the issue, the Respondent maintained that the earlier Tribunal decision was applicable and favored the Revenue's stance.

4. In response, the appellants' counsel highlighted the omission of considering the Madras High Court judgment and subsequent Tribunal decisions that supported the eligibility of inputs like packing materials for Modvat credit. The counsel argued that these decisions had taken a different view, aligning with the appellants' position on the issue.

5. The judgment analyzed the case law and found merit in the appellants' arguments, citing precedents like Brooke Bond Lipton India Ltd. and Commissioner of Central Excise, Pune v. Sathe Biscuits & Chocolate Co. Ltd. The Tribunal's decisions in these cases supported the eligibility of materials like 'Printing Ink' and 'Media' for Modvat credit under Rule 57A.

6. Consequently, the Tribunal ruled in favor of the appellants, allowing the appeal and setting aside the impugned order. The judgment affirmed that items in dispute, including 'Printing Ink', Poly Granules, H.R. Medias, and other specified materials, were deemed eligible for Modvat credit as inputs essential for the manufacturing process.