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TMI Blog1994 (5) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the preceding financial year in the assessable value of the final products under Section 4 of the Act; (iii) Cylinder for packing gases and (iv) Plywood for tea chest. (b) From (a) above, it is seen that Modvat Credit is available on inputs used for the manufacture of final products and this input includes packaging materials excepting the exceptions mentioned therein. It does not include credit of duty paid on raw materials for packaging materials, if the final product of the assessee company is not container for packaging but some other thing which requires a container for packaging. (c) If the above interpretation of the Rule as made by the Deptt. is correct then, is it legal and proper for the Tribunal to interpret the Rule in such a way as has been done by them in the order vide Para 6 to 7 (at page 6 of the Hon ble CEGAT s order) that As correctly contended by the appellants there is nothing in Rule 57A to warrant the proposition that the expression, packing material figuring in the explanation clause thereunder is confined to only ready-to-use packing material like cartons and other containers. Material used for making packages also would be covered within the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be considered as an input for manufacture of finished product namely Chocolate but only as an input for manufacture of printed cartons which cannot be treated as intermediate product in the manufacture of Chocolates [1988 (38) E.L.T. 351 : 1990 (48) E.L.T. 50 relied on .] Therefore, keeping in view of the above decision, it is clear that in the instant case Grey Board, Glassine Papers, G.P. Paper Sulphide Papers etc. used as raw material for manufacture of cartons, corrugated rolls etc. cannot be treated as intermediate products in the manufacture of Biscuits. (d) According to Rule 57A of the Central Excise Rules, credit of duty paid on input would be admissible if the said input is used for manufacture of final product and the input includes packaging materials. In the present case final product is Biscuit and not carton, corrugated rolls etc. which are packaging materials for packing Biscuits. Since no duty was paid on packaging materials i.e. carton, corrugated rolls etc. are the assessee entitled to credit of duty paid on raw materials required for manufacture of packaging material and to utilise them for payment of duty on final product i.e. Biscuit, specially when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication on certain decisions of the Tribunal and executive instructions of the Central Board of Excise and Customs which do not lay down the correct law. They have been comprehensively overruled by the Hon ble Madras High Court in Ponds India Ltd. v. Collector of Central Excise, reported in 1993 (63) E.L.T. 3. The Tribunal has relied upon this judgment also in the Order under Reference Proceedings now. There is no indication that the position of law as interpreted by the High Court which has been followed by the Tribunal has been taken note of while making this Reference Application. Shri Das, learned Senior Advocate also pointed out that an identical Reference Application filed by the same Collector involving the present respondents only has been disposed of by this Tribunal vide Order No. R-658/Cal/93 dated 30-9-1993. He handed over a copy of the said order and submitted that as the position is the same, the present Reference Application may be dismissed on the same basis. 4. We have considered the arguments. The point made by the learned Senior Advocate is factually correct. We find even the wording of the questions of law framed in the present application follows the patt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aft Paper used for the manufacture of printed cartons cannot be considered as an input for the manufacture of finished product namely Chocolate, but only as an input for the manufacture of printed cartons which cannot be treated as intermediate products in the manufacture of Chocolates, the Collector has stated that it is clear that the inputs in the instant case are used as raw materials in the manufacture of cartons, corrugated rolls etc. which cannot be treated as intermediate products in the manufacture of Biscuits. This is all that is said in the Application in this regard. It has not been developed into a question of law for reference to the Honourably High Court. 7. The stand taken by the Tribunal in certain earlier decisions that the materials are used for manufacture of containers etc. and not for the final products and hence they are not treatable as inputs for the latter nor are they their intermediate products, has been conclusively overruled by the Hon ble Madras High Court in Ponds India Ltd. v. Collector of Central Excise reported in 1993 (63) E.L.T. 3. This judgment has been followed while passing the Order under Reference Proceedings now. These overruled decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at, but for that process, manufacture or processing of goods would be commercially inexedient, articles required in that process, would fall within the expression - in the manufacture of goods. In Rule 57A the coverage is wider as the expression - `inputs - covers not only goods used in manufacture but also goods used in relation to the manufacture of the final products. The application of this ratio is quite appropriate in the present case and the contention to the contrary is devoid of merit. 9. The last question figuring at sub-para (f) of Serial No. 8 of the Reference Application again suffers from the fixation of the concept of packaging materials and raw materials therefor. There is no legal sanction for the view that Modvat Credit is for ready-to-use packaging materials and not raw materials therefor. It is stated that such raw materials can be put to various uses one of which is making of packaging materials and that the raw materials themselves are not recognisable as packaging materials. This argument does not advance the case of the applicant Collector. Even if the materials in question are capable of other uses, the fact here is that they have been used for making ..... X X X X Extracts X X X X X X X X Extracts X X X X
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