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TMI Blog1997 (3) TMI 250X X X X Extracts X X X X X X X X Extracts X X X X ..... tment proposing to disallow the Modvat credit so availed by the appellants alleging that these were not eligible to be considered as inputs in view of the Explanation clause under Rule 57A. The allegation was that the items ring travellers, filter packs and cutting blades were parts of machines used in the manufacturing process by the appellants and since machines are specifically excluded from the scope of the expression inputs in terms of the aforesaid explanation, these parts are also to be treated as ineligible for grant of Modvat credit. It was also alleged that cutting blades are in the nature of tools. As regards G.I. stitch wire the finding was that this item purchased by the appellants was sent to their job worker for joining the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for fastening the flaps of corrugated boxes, the learned Counsel referred to the decision of the High Court of Madras in Ponds India Ltd. v. CCE reported in 1993 (63) E.L.T. 3. As regards the other items it was contended that these are used by the appellants for packaging purposes and the issue stands covered by the Tribunal decision in the case of Hindustan Lever v. CCE reported in 1994 (70) E.L.T. 595 as far as Bopp tape is concerned and the Ponds India judgment for the other items. 4. In reply, Shri Ram Saran, learned DR referred to the discussion in the impugned order and contended that the machinery items in question (item Nos. 1, 2 and 3 considered above) are excluded from the scope of the expression inputs by virtue of the Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considered to be a factor justifying the denial of Modvat credit. Such containers and bottles were held to be intermediate products in the manufacture of the toilet preparations, the final product made by Ponds India Ltd. The said decision will apply on all fours to the present case, submitted the learned Counsel. 6. I have taken note of the submissions made by both the sides and perused the record. The impugned decision of the authorities below have been taken prior to the Larger Bench decision in Union Carbide referred to above. In paragraph 29 of the said order while referring to items like felts, phosphor bronze, stainless steel wire cloth, wire mesh and dandy cloth used in the machines in the manufacture of paper or paper product ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the ground that any intermediate products have come into existence during the course of manufacture of the final product and that such intermediate products are for time being exempt from the whole of the duty of excise leviable thereon. Here again, for the term `manufacture , the abovesaid Section 2(f) definition read with the abovesaid Chapter Note No. 4 to Chapter 33 would apply and so, the abovesaid containers could be taken as the abovesaid `intermediate products which have come into existence `during the course of manufacture of the final product . In such a case, the requirement mentioned in the proviso to Rule 57D(2) will stand satisfied since the abovesaid containers, the intermediate products, are admittedly `used within the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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