Minutes on monthly Modvat meeting held at Bangalore on 29-11-1989 - Point No. 21 & 23 regarding admissibility of Modvat on packaging material leviable to specific rate of duty - Central Excise - 28/90-CX.8

Minutes on monthly Modvat meeting held at Bangalore on 29-11-1989 - Point No. 21 23 regarding admissibility of Modvat on packaging material leviable to specific rate of duty Circular No. 28/90-CX.8 Dated 20-4-1990 [From F. No. 263/10/90-CX.8] Government of India Central Board of Excise Customs New Delhi Subject : Minutes on monthly Modvat meeting held at Bangalore on 29-11-1989 - Point No. 21 23 regarding admissibility of Modvat on packaging material leviable to specific rate of duty. I am directed to invite your attention is invited to the minutes on Point No. 21 23 of the monthly Modvat meetings held at Bangalore on 29-11-1989, on the above subject. Doubts have arisen whether Board's instructions issued vide F.No. 267/30/88-CX.8, dated 28-6-1988 permitting Modvat credit on the final products which were chargeable to specific rate of duty require re-consideration or not. The matter has been examined by the Board again. It is observed that the basic principle of the Modvat scheme is to permit the credit of duty paid on inputs including packaging material for payment of duty on the final products if it is used in or in relation to the manufacture of such final products. .Therefore the fact that the final product is chargeable to advalorem rate or specific rate of duty should not come in the way of granting Modvat credit on the inputs if they are used in or in relation to the manufacture of the same. Board's instructions cited above may therefore be followed and Modvat credit should not be denied in case the final product is chargeable to specific rate of duty. Trade field formations may be informed accordingly. Receipt of this letter may please be acknowledged.