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TMI Blog2008 (1) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... packaging materials were cleared separately and were not used within the factory of production but at the premises of the depots C & F agents, the same cannot be considered as being used in or in relation to manufacture of final product and therefore sought to deny the Modvat credit on the same. The show cause notice, was adjudicated, wherein a demand of Rs. 6,25,561/- was confirmed along with interest and a penalty of equivalent amount was imposed under Section 11AC which order was upheld by the Commissioner (Appeals). 2. The ld. Advocate for the appellants submits that the final products manufactured by the appellants are packed in the primary cartons and thereafter the same were cleared with master packing cartons to their depots and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvocate took us through the decision of the Apex Court in Vikram Cement case wherein in para 21, it is clearly said that the definition of input under Rule 57AA was not entirely different from the manner in which the said work had been expanded in the explanation to Rule 57A of the Modvat Rules. In view of this it was submitted that the definition of input nowhere places the restricion that the inputs are to be used within the factory of production. Therefore once inputs are used in or in relation to the manufacture of the final product, the credit on the same cannot be denied, irrespective of whether the inputs were used within the factory or outside the factory. 4. Alternatively it was submitted that Section 4 of the Central Excise Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to May 2005. It was submitted that in the first show cause notice said, major part is hit by time-bar as the demand was beyond the period of one year. The show cause notice issued on 7-2-2005 nowhere alleges that the credit on master cartons was availed with intention to evade duty by suppression or mis-statement of facts. It merely states that they have knowingly and deliberately availed inadmissible credit without specifically bringing out, that this was done with intention to evade payment of duty by suppression or mis-statement of facts. The fact is that the credit taken on master cartons was never suppressed, as the same was reflected in RG 23A register and master cartons were cleared along with final products at the time of clearance, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition only, the master cartons cannot said to be used in or in relation to manufacture of the final product when the same were used at depots only. Accordingly, I hold that the credit in respect of these cartons will not be available prior to 13-5-2003. 6. Subsequent to 13-5-2003 since the depot has been defined as a place of removal and goods for the first time are sold from depot as there is no other sale at the factory gate, the master cartons have to be considered as have been used in or in relation to the manufacture of final products and the credit of duty paid on such master cartons cannot be denied. Once cost of such additional packing at depot has been considered to be inclusive in the assessable value as per the CESTAT decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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