2009 (4) TMI 723

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..... are kept in crates and despatched to the dealers. There is an arrangement for return of empty bottles along with crates. The respondent have taken certain deposits to ensure the safe return of empty bottles and crates. In the event of bottles getting broken and the crates not being returned, the respondents is enforcing the agreement and recovering value of the bottles and the crates and appropriate the amount from the securities given by them. The bottles and crates are included in the term packing material and treated as input and Cenvat credit has been taken on these materials. Though they are included in the terms inputs , these are normally meant for repeated use. The original authority held that the party has recovered the amount .....

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..... as they are capable of repeated use. Similarly, the arrangement in respect of crates in which the bottles are kept and sold. What is sold to the dealers and ultimately to the consumers are beverages. To say that the bottles and crates are sold is little farfetched. At any rate, it is not a case of the glass bottles and crates being removed as inputs as such . The recovery of amounts towards broken glass bottles cannot be treated as arising out of sale of such bottles. The order of the original authority clearly record that the value of bottles and crates form part of the value of aerated water. Merely because some portion of the bottles and crates get destroyed or are not returned and because the respondent recovers the value towards non-r .....

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..... the deposit of the empty container is not an additional consideration for sale of the particular product. 4. The position has been ascertained from the State Metrology Department also and they have confirmed that receipt of returnable deposit or empty container is not a contravention of the provisions of the Weights and Measures Act, 1976 or the Packaged Commodity Rules, 1977, framed thereunder. 5. In view of the above, clarification issued vide Serial No. 4 of Board s Circular No. 643/34/2002-CX., dated 1-7-2002 [2002 (143) E.L.T. T39] will apply to goods assessed under Section 4A also. In other words, if the cost of reusable containers (glass bottles, crates, etc.) is amortised and included in the cost of the product itself, the quest .....

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