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TMI Blog2013 (3) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... iscos Blender Yarn falling under Chapter 52 and 55. The appellants had taken Cenvat credit of Rs.20,800/- on the goods 'Plastic Crates', falling under Chapter 3923.90 during the months of September 2001 to May 2002. Stating that the goods are neither specified under Rule 2 of Cenvat Rules 2001/2002 as "capital goods" nor can the same be considered as "spares and accessories of the machineries" used in the spinning of yarn in the factory, a show cause notice dated 27.09.2002 was issued to the appellant as to why (i) the credit of Rs.20,800/- should not be recovered under Rule 12 of the erstwhile Cenvat Credit Rules 2001 and Rule 12 of the Cenvat Credit Rules 2002 read with Section 11A(1) and 38A of Central Excise Act, 1944; (ii) interest as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al before the Tribunal. The Tribunal set aside the order of the appellate authority and allowed the appeal holding that the 'Plastic Crates' used by the appellants as material handling equipment can hardly be treated as "input" and the definition of "input" under Rule 2 of the Cenvat Credit Rules 2001/2002 cannot be extended so as to encompass the goods, which are conventionally regarded as "capital goods" 6. Being aggrieved by the Order of the Tribunal, the appellant has preferred this appeal and the appeal was admitted on the substantial questions of law: "a) Whether the Tribunal is correct in holding that the item under dispute namely 'Plastic Crates' is not eligible for credit under Capital Goods despite there being past precedents ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... referring to number of decisions held as under: "14. Reference to all the above decisions was necessary to understand the scope of the term "accessory". If the plastic crates are held to be an accessory to the main machine, appearing against Sr.No.(i) of the definition of the capital goods, as contained in Rule 2(b) of the Cenvat Credit Rules, 2002, they would earn the status of the eligible capital goods for the purposes of Modvat. The appreciation of the various judgments on expression "accessory" as discussed above, leads us to observe that an accessory may or may not be required for essential working of the main unit, but is an object which is used for the convenience and effectiveness of that unit. It may also not be necessary that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of interpretation of the term "accessory" by various Courts, the plastic crates are required to be held as accessory only. If that be so, the same would fall under Sr.No.3(i) of Rule 2(b) of Cenvat Credit Rules, 2002. 24. We full agree with the above judgment on the issue. The plastic crates used for transporting/storing of the goods in the factory of production. Proper storage of inputs is essential for efficient manufacturing process and in absence of proper facilities for storage and transportation; the same will affect the manufacturing process. Further, the Hon'ble Supreme Court in the case of M/s.Rajasthan State Chemical Works (1991 (55) E.L.T. 444(SC)) has observed that the manufacturing process starts with the drawing of water from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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