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TMI Blog1993 (11) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... or in relation to the manufacture of their product, Vanaspati is used by them to close the flaps of the corrugated cardboard boxes in which the pouches containing Vanaspati are packed. The Assistant Collector had wrongly held that only the pouches are packing material and not the cardboard boxes. Hence, cellophane tapes were held to be not packaging material. The Collector (Appeals) upheld the Assistant Collector s order on the reasoning that cardboard boxes are used only for safe transportation of the goods and hence cellophane tapes used for sealing such cardboard boxes cannot be treated as packaging material. It is contended in the Appeal that the expression packaging material has a wide import and all items which are used in the packa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e v. Swaraj Mazda In the former case, Modvat Credit was held to be admissible by this Regional Bench in respect of certain varieties of Paper and Board etc. used as packaging material in relation to the manufacture of biscuits. In the latter case, Mats supplied in motor vehicles have been held to be inputs eligible for Modvat. Shri Gupta pleaded that their Appeal be allowed as their case is on even stronger ground. 3. Shri N.K. Mandal, learned Departmental Representative replied to the arguments advanced on behalf of the appellants. He referred to the decision of the West Regional Bench in Parle Products (P) Ltd. v. Collector of Central Excise, 1992 (57) E.L.T. 152, wherein they had held that Modvat credit would be available only in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... naspati as it is produced in the plant, or even after it is packed in the plastic pouch but the product that is cleared from the factory in the packed condition. It is cleared from the factory in a marketable condition only after being packed in the cardboard boxes, duly sealed. In that view of the matter, the cellophane adhesive tapes are a component in the final product. Such a view would be consistent with the provisions of Section 2(f) of the Central Excises and Salt Act, 1944 defining manufacture as including any process incidental or ancillary to the completion of a manufactured product. In this context, the Supreme Court decisions in the following cases will be relevant :- (1) J.K. Cotton Spinning Weaving Mills Ltd. v. Sales Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eligible to be treated as utilised in the manufacture of such paper. It was observed that anything required to make the goods marketable must form part of the manufacture and any raw material or any material used for the same would be component part for the end product. In Star Paper Mills case, Paper Cone on which paper was wound for being cleared as Paper Rolls was treated as used in the manufacture of such paper for the benefit of Notification 201/79. Viewed in the context of these judgments by the Supreme Court, the case for grant of Modvat Credit for cellophane adhesive tapes used for sealing the cardboard boxes is quite secure, particularly as the relevant Rule 57A is more broad based than the other provisions covered by these judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case points to such use in packaging. It was held by the Special Bench D in Kissan Products Ltd. v. Collector of Central Excise that Coproco adhesive used in fixing the label on the unit containers meant to contain P.P. foods is eligible for the benefit of Notification 201/79, as used in the manufacture of such P.P. foods. It is relevant to note that the expression packaging material has only been mentioned in the Explanation under Rule 57A as one of the items included in the expression inputs . It is illustrative in scope. The term input actually refers to goods used in or in relation to the manufacture of the final product. Hence what one has to look for in deciding the admissibility of Modvat should be only whether ..... X X X X Extracts X X X X X X X X Extracts X X X X
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