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TMI Blog1990 (3) TMI 172X X X X Extracts X X X X X X X X Extracts X X X X ..... tin plates/tin sheets used by them for making containers used for packing vegetable product. Their claim was that the manufacture of tin containers by using the tin plates/tin sheets is in relation to the manufacture of their final product viz. vegetable product. They were initially directed to deposit the amount of credit under Section 35F of the Central Excises and Salt Act, 1944. On their failure to deposit the said amount as directed their appeal was rejected. 2. In their appeal against the order of the Collector (Appeals) they had contended that appeal was rejected by him not on merits but on procedural grounds which also was not correct as predeposit is a prerequisite only in respect of duty demanded or penalty imposed but not for M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the sides we proceeded to hear the appeal impliedly granting the stay prayed for by the applicants (appellants). 6. On behalf of the appellants, Shri S.K. Sinha, learned Advocate pleaded that their appeal may be allowed as the tin plates and tin sheets are eligible inputs for the grant of Modvat benefits as they are used in relation to the manufacture of their final outputs on which they pay duty. He referred to the Order-in-Appeal passed in their favour by the Collector (Appeals) subsequently. Reacting to the arguments of the learned Counsel and the contentions raised in the appeal, Shri M.N. Biswas, learned Sr. Departmental Representative pleaded that the subsequent order of the Collector (Appeals) is not legally correct as per the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tin containers are made and used captively, credit would be allowable on the tin plates, being packing materials. He also held that the containers could also be covered under Notification No. 217/86 and he, therefore, allowed the appeal. In doing so, the following arguments of the Assistant Collector were rejected. The tin plates are inputs only for the metal containers which are the final products as far as the tin plates are concerned. These containers if exempt from duty, Modvat credit of the duty paid on the tin plates is not available in terms of Rule 57C. For vegetable product on which duty is paid, the tin plates cannot be said to be the inputs. They are inputs only for the metal containers and only such containers are inputs for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containers are used subsequent to the manufacture of vegetable product for packing the same. The fact that under Section 2(f) the term manufacture includes any process incidental or ancillary to the completion of a manufactured product or that the cost of the metal containers is included in the price of the vegetable product packed therein does not make the metal containers an intermediate product in relation to vegetable product. Mercifully, vegetable product is made from intermediate products more suitable for edible purposes than metal containers. Its being packed in metal containers does not make the latter an intermediate product in its manufacture. 9. In our opinion, the question for determination turns on the expression packaging m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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