Modvat credit of duty-paid on flattened containers utilised for packing of Food/Fruit/Vegetable product - Regarding - Central Excise - 26/92-CX.8

Modvat credit of duty-paid on flattened containers utilised for packing of Food/Fruit/Vegetable product - Regarding Circular No. 26/92-CX.8 Dated 23-12-1992 Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Modvat credit of duty-paid on flattened containers utilised for packing of Food/Fruit/Vegetable product - Regarding. A large number of representations have been received by the Board saying that Modvat credit of duty-paid on flattened metal containers, which are utilised for packing the fruit/vegetable preparations, is not being allowed mainly for the reason that they are 'reformed' by fixing the bottom lid in their factory and used in the packing of the final products and since such reformed containers are exempted from duty, no credit of duty-paid on the flattened containers could be allowed. 2. This issue has been examined by the Board. Duty on metal containers is required to be paid only at flattened stage and no duty is required to be paid on the reformed metal containers. These flattened metal containers are procured in that form (i.e. flattened form) for the ease of transportation as transporting of rounded cans would involve huge expense and other difficulties. The flattened metal containers suffer duty at the rate applicable to 'metal containers' and for all Central Excise purposes, it is treated as 'Metal Containers'. Although we have clarified earlier vide Circular No. 10/90-CX.8, dated 13-2-1990 (F. No. 263/20/89-CX.8) that packing material must be received in the factory in a ready to use condition to become eligible for credit, the Board has now decided that the 'flattened metal containers' having discharged the duty as metal containers and brought to the user's factory in that condition to facilitate easy transportation, can be regarded as direct input and Modvat credit can be allowed on such folded/flattened metal containers provided the reformation takes place within the factory where the food products are manufactured.