9911796707
TMI Blog1993 (1) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... dings before us, holding that the facility of Modvat credit would be admissible to them in respect of HDPE bags/sacks used by them for packing their final product, cement, for the period upto 16-9-1990 prior to the issue of Notification No. 35/90(NT) dated 17-9-1990 by which the said goods were taken out of the definition of input in the Explanation to Rule 57A. He had observed in his order that the said input was taken out of the definition of input in the Explanation under Rule 57A by issue of Notification No. 35/90(NT) dated 17-9-1990 and that it was considered as inputs for the purpose of Rule 57A prior to the issue of the said Notification. He, therefore, held that Modvat credit of duty paid on HDPE bags/sacks could not be denied to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, been contended that the Notification in question cannot be construed as the demarcating point for excluding HDPE bags/sacks from the benefit of Modvat credit. The said Notification is clarificatory in nature and does not indicate the existence of HDPE bags/sacks within the extent of the definition, input, under Rule 57A. It has, therefore, been pleaded in the appeal that the impugned order-in-appeal be set aside. 4. Shri B.B. Sarkar, learned Departmental Representative reiterated the contentions raised in the appeal. 5. Shri A.K. Bhowmick, learned Consultant argued the case of the respondents. He pointed out that the point raised in the appeal that HDPE bags/sacks are classifiable under Chapter 63 and, accordingly, they wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Even without this Trade Notice and Board s Tariff Advice which has given rise to it, the stand of the Department in the appeal based on the classification of the goods does not get any support as the respondents had been receiving the HDPE bags under cover of Gate Passes showing their classification under 3923.90. Such a practice of assessment had been followed in different Collectorates like Indore, Patna and Hyderabad from where they were getting their supplies of HDPE bags. Only if the said goods had been classified under Chapter 63 at their place of manufacture, would they lose their eligibility for Modvat benefit. 7. The question of classification of HDPE bags apart, as a criterion for deciding their Modvat eligibility, the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence cannot be termed as input, under Rule 57A for eligibility for Modvat credit. The authority of Circular F. No. 261 /25/1 /88-CX. 8, dated 16-2-1988 has been cited for such a proposition. We cannot agree with this view. This stand ignores the essential fact that the final product in question is Cement packed in bags. The definition of manufacture under Section 2(f) of the Central Excises and Salt Act includes any process which is incidental or ancillary to the completion of the manufactured product. Under this provision, packing of cement in bags is part of the manufacturing of cement. Hence the HDPE bags which are packaging materials are used in the manufacture of cement and are eligible for Modvat credit. This is also consistent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
