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TMI Blog1996 (5) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the plastic crates cannot be regarded as an input for the final product `aerated waters' inasmuch as manufacture of aerated waters is complete after the bottles have been filled and sealed and the material is ready for sale in the market without the plastic crates. It was alleged that the plastic crates are essentially used for convenience in handling and for safety in transportation. It cannot, therefore, be said that such crates are used in or in relation to the manufacture of aerated waters. 1.2 The respondents in their written reply to the show cause notice urged as follows : (a) The glass bottle manufacturers sent the goods (empty bottles) to them in crates filled with 24 glass bottles each. These bottles are automatically picked up by a machine in the integrated automatic process from the crates. After completing the washing cycle, filling process and final inspection, the filled glass bottles are automatically put back into the crates. At the time of clearance, bottles are cleared along with the crates on payment of appropriate duty. At the end of the day, when empty glass bottles are received back from the market, they are also received with the crates. Thus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be presumed to be packaging materials for 'aerated waters'. Plastic crates are merely being used to facilitate transportation of finished product. Crates are not sold along with aerated waters. The value of crate is not included in the price of aerated waters for the purpose of levy of Central Excise duty. The contentions that value of crate has been included in the assessable value of aerated waters on average life expectancy basis of crate is not tenable since there is no provision in the Central Excise Rules to add the cost of durable and returnable articles in that manner. 3.1. Learned Advocate, Shri K.K. Banerjee, for the respondents, in rebutting the foregoing submissions of the learned SDR, submits that crate is essential for marketability of 'aerated water in bottles' in wholesale trade. Therefore, crate as a packaging material of 'aerated water in bottles' is an input in relation to the manufacture of the excisable goods. He relies on Supreme Court's judgment in the cases of Eastend Paper Ltd. and Jaya Engineering Works (supra). 3.2. Learned Advocate further submits that so far as the plea that plastic crate is an article of durable and returnable nature is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acture of aerated waters, the plastic crate is used as a container of 24 empty bottles. After the glass bottles are filled with the aerated waters it is again used as a container for facilitation in storage and handling of aerated waters bottles ; further at the time of marketing at the factory gate sale is made of aerated waters in respect of crates and not in terms of individual 'aerated waters' bottles. In other words, plastic crate is used as a container for putting the excisable goods namely 'aerated water in bottles' in wholesale market. Again no evidence has been brought on record by the Revenue that wholesale trade is carried on at the factory gate by treating 'aerated water bottle' as a unit of wholesale. 4.3. Plea of the department that a crate is merely a handling device or accessory and not a 'container' or a package also stands rebutted on the analogy of the Supreme Court's judgment in the case of G. Claridge and Co. Ltd. v. Collector of Central Excise [1991 (52) E.L.T. 341 (S.C.)]. In that case, a question was considered by the Apex Court whether egg trays are 'containers' or not. In considering the aforesaid question, the Hon'ble Court examined the definition o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tacle or enclosure used in packaging and shipping. (2) Relatively large, reusable enclosures to be filled with smaller packages and discrete objects, to consolidate shipments and allow transport on railway flat cars, flatbed trailers, aircraft, in ships' holds or as deckloads, etc. (See CARGO TRANSPORTER : CONTAINERIZATION). (3) Any receptacle for holding a product." [Abstract from Glossary of Packaging Terms (USA)] "Container : A large box for intermodal transport, containing many smaller boxes of different shapes and sizes as well as individual articles." [Abstract from Glossary of Packaging Terms (Australia)] 9. The above definitions would show that the expression `container' is used in three different senses: in a broad sense, it means a receptacle which contains; in a narrower sense, it means a receptacle in which articles are covered or enclosed and transported; and in a more limited sense, it means enclosures used in shipping or railway for transport of goods. If used in a broad sense, `container' would include a tray because it is a receptacle which contains articles and, therefore, an egg tray would be a `container'. But an egg tray would not be a `container' in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s while considering the terms "packaging material" used in Central Excise Rule 57A. Therefore, term 'packaging material' referred to in Rule 57A while being included specifically as an input (along with paints) under Explanation to the said rule will mean containers of all types - whether with lids or without lids. 4.5. In the said Rule 57A, term "input" specifically includes inter alia 'packaging materials' in general but specifically excludes packaging materials in respect of which any exemption to the extent of duty of excise payable on the value of packaging material is being availed of in packaging of any final product or (ii) when the cost of such packaging materials or container is not included in the assessable value of the final products under Section 4 of the Act. The expression 'packaging materials' or `containers' are not defined in Rule 57A. `Packaging materials' will include not only containers in a broad sense as referred to by the Apex Court in G. Claridge and Company Ltd. (supra) but also materials out of which containers are made as held in the cases of Ponds (I) Ltd. by Hon'ble Court of Madras reported in [1993 (63) E.L.T. 3 (Madras) ], as also held by this ..... X X X X Extracts X X X X X X X X Extracts X X X X
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