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TMI Blog1991 (8) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... ker and then utilised in their factory. The learned original authority has held that tissue paper as such could not be used by the respondents as packing material and it has necessarily to be wax coated and inasmuch as wax paper is different commodity falling under different Tariff heading the wax paper could not be considered as input so far as the respondents are concerned. The learned lower appellate authority, however, has accepted the respondents plea and held that mere waxing and change of classification of the input on account of waxing would not affect the respondents claim for MODVAT credit inasmuch as the wax paper has to be taken as intermediate product and has set aside the original authority s order. 2. The appellant-Collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned JDR for the Department pleaded that the MODVAT declaration has been filed by the respondents showing the tissue paper as an input and pleaded that the respondents had removed the tissue paper for waxing to the premises of job worker after taking the permission under Rule 57F(2) and pleaded that at the job worker premises out of the tissue paper a different commodity viz. wax paper emerged and the same was exempted from payment of duty under Notification 49/87. He pleaded that wax paper could not be treated as intermediate product and in that view of the matter once an input had been used and a different excisable product, which was exempt from payment of duty, emerged by processing the same the benefit of MODVAT credit could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure that no additional duty liability accrued when the inputs were processed for use in relation to the final product. He pleaded that inasmuch as the processing of waxing of paper was integrally connected with the use of the paper for the final product the benefit of MODVAT credit would be available to them and in this connection he cited the judgment reported in 1989 (43) E.L.T. 201. 5. We observe that the short point that falls for our consideration is whether the specified input brought in for the purpose of use in relation to a specified finished product under Rule 57A when on processing gives rise to an intermediate product, which is exempt, the benefit of MODVAT credit in respect of the inputs received would be available. We ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a manufacturing process. Thus out of the tissue paper a different commodity has come into existence and this commodity is being used as a packing material. Wax paper cannot be treated as intermediate product as it does not emerge out of the manufacturing stream of the finished product during the process carried out on the inputs. Wax paper has been produced out of the tissue paper which by a specific inclusion under Rule 57A has been treated as an input. In the above view of the matter, therefore, we hold that the wax paper has to be treated as a finished product by itself and it is only by the application of the provisions of the MODVAT Rules that the benefit of MODVAT credit in respect of the tissue paper in relation to the use of the wax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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