9911796707
TMI Blog2002 (2) TMI 1169X X X X Extracts X X X X X X X X Extracts X X X X ..... holders of CE Regn. No. 2/MPZ/92 are manufacturers of carbon black of different grades viz. HAF N-330, GPF N-660 and FED N-550. As per the process description of carbon black filed along with declaration, the process is completed when the particles of carbon black reaches the silo and when it is bagged in 25 kg paper bags using automatic machines, the manufacture is completed. The carbon black so manufactured is then entered into RG 1 Register. The carbon black so accounted is then subjected to quality test by the assessee and then out of specification material declared by the assessee s R D again been mixed with fresh carbon black, by tearing the bags for an acceptable quality and repacked in new bags. The bags torn were accounted separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng. Therefore reprocessing is not an act of manufacture. Not being an act of manufacture, the wastage arising during the process would not be eligible for Modvat credit. In the instant case, packing materials are inputs eligible for Modvat credit but the paper bags were torn off after the manufacturing process was over during the course of reprocessing. The wastage having arisen as a result of reprocessing which does not amount to manufacture has been rightly held to be ineligible for Modvat credit by the original authority. The judicial citation relied upon by the appellant is not germane to the present case since in that case dry cell batteries which were rejected during testing were treated as waste. In the instant case it is not so as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . These Orders, fail to take note, that in the erstwhile RG 1 register, even goods in Finishing Room were required to be entered, besides the fully manufactured and ready for dispatch goods. In this case, therefore, the mere fact that entry was made in RG 1, would not therefore be conclusive that goods are marketable. It is an uncontested position, that the sub-standard lots are not marketed. We find that a process incidental or ancillary, to make the lot marketable, would be processing for manufacture. All damage to inputs, especially of packing material i.e. paper bags, occurring in such incidental or ancillary process of manufacture, would be damage during manufacture. Such damage would be entitled to the benefit of Modvat credit, when w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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