9911796707
TMI Blog1993 (3) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... r of Central Excise, Calcutta D Division, which was challenged in the Appeal before him. By his said order, the Assistant Collector had disallowed Modvat Credit of Rs. 72,712.40 (basic excise duty) and Rs. 3,976.90 (Special Excise duty) in respect of materials like Grey Board, Glassine Papers, G.P. Papers, Sulphite Papers sent by them to job workers for conversion into cartons which were returned to them for use as packaging materials for utilisation in the manufacture of biscuits. Their contention before the authorities below was that Rule 57A of the Central Excise Rules did not stipulate anywhere that packaging materials defined in the Explanation under the said Rule as being included in the term Input should be in a ready to use cond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate appeared for the appellants. He pointed out that the Tribunal decision in Ponds India Limited and the Collectorate Trade Notice relied upon by the Collector (Appeals) in his impugned order had been specifically considered by the Honourable Madras High Court in their recent decision in Ponds India Limited v. Collector of Central Excise reported in 1993 (63) E.L.T. 3. They had rejected the department s stand that Modvat Credit would not be admissible for raw materials for packaging materials. The Tribunal decision in the Ponds India case was held to be erroneous by them. Shri Das also pointed out that the Honourable High Court had quoted relevant paragraphs from the Tribunal decision in the Rasoi Ltd. v. Collector of Central Excise : 1990 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in Ponds India Ltd. case cited by the learned Counsel, he would leave the matter to be decided by the Bench. 5. We have considered the submissions. We have perused the record as well as the decisions cited by the learned Counsel. The question of grant of modvat credit for packaging materials in the light of Rule 57A has been the subject matter of several Tribunal decisions. Two decisions are of direct relevance in the present context as the inputs covered therein were paper converted/treated to form other varieties thereof as well as cartons in relation to the manufacture of biscuits. These were in Super Snacks P. Ltd. v. Collector of Central Excise : 1990 (47) E.L.T. 60 and 1992 (57) E.L.T. 152 (Parle Products Pvt. Ltd. v. Collector ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 76 STC 203] and of the Supreme Court in Punjab Distilling Industries v. Income Tax Commissioner : AIR 1959 Supreme Court 346 regarding liquor sold in bottles, the High Court allowed the plea of the Counsel for the applicants, Ponds India Ltd. that plastic granules utilised for manufacturing the containers for packing the excisable goods for making them marketable would be component parts for the goods which are the end-products. The fact that the containers were exempt from duty was held to have no effect on eligibility of the granules which go to make up the containers as these containers could be taken as intermediate products which would be covered by the proviso to Rule 57D (2). 6. The High Court then referred to the clarification of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng materials. This proposition cannot be agreed to, as held by the Madras High Court. Even if they be general purpose articles because they can be put to uses, the fact is that in this case, they have been used in the manufacture of another material which is a process in relation to the manufacture of the declared final product. This is all that is necessary for the purpose of Rule 57A. Benefit under this Rule is available not only for goods used in the manufacture of the final product but those used in relation to the final product also. There is nothing in this Rule that the use should be directly in the manufacture of the final product. Even if it is held that only the processed paper or treated paper in the present case can be said to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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