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TMI Blog2009 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... ce within their factory premises would earn modvat credit either as capital goods or as input. Such plastic crates are used for internal transportation of the raw material/semi-finished and finished goods from stores to processing machine and from one machine to other machine and to finished goods storage. As such, they are mainly used for storage and supply of different components of radiators, in the production of which the appellant is engaged, in the production line. These plastic crates, due to wear and tear on account of usage are also periodically replaced by the assessee. 2. We have considered the submissions made by both sides, duly represented by Shri R.C. Saxena, Shri S.R. Dixit, learned advocates appearing on behalf of the appellant and Dr. M.K. Rajak, learned SDR appearing on behalf of the Revenue. 3. The learned advocate appearing has strongly contended that the plastic crates are eligible capital goods for the purposes of Cenvat credit and in the alternative advanced his case for availability of credit in respect of such crates, as input. 4. First dealing with the appellant's claim of credit as capital goods, we find that during the relevant period, the definition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ird New International Dictionary as follows : "an object or device that is not essential in itself but that adds to the beauty, convenience or effectiveness of something else." Other meanings given there are : "supplementary or secondary to something of greater or primary importance", "additional", "any of several mechanical devices that assist in operating or controlling the tone resources of an organ". "Accessories" are not necessarily confined to particular machines for which they may serve as aids. The same item may be an accessory of more than one kind of instrument." 8. We also take note of another decision of the Hon'ble Supreme Court in case of M/s. Mehra Brothers v. Jt, Commercial Officer - 1991 (51) E.L.T. 173 (S.C.), wherein while holding car seat covers as accessories to motor vehicles and thus exigible to sales tax, the Hon'ble Court observed as under: "......In our view the correct test would be whether the article or articles in question would be an adjunct or an accompaniment or an addition for the convenient use of another part of the vehicle or adds to the beauty, elegance or comfort for the use of the motor vehicle or a supplementary or secondary to the main or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evident therefore, that an 'accessory' by its very definition is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product. Applying the test laid down in Mehra Bros, case (supra), it cannot be denied that name plates add to the convenient use of the motor vehicle. Name plates serve a very useful purpose inasmuch as it gives an identity to the vehicle. Each vehicle comes with different brand name and in different models having distinct features. The manufacturers of different type of models of vehicles market them under a name and the vehicles are recognized and referred to by the name plate affixed on them. Name plates convey to the consumers the distinct features it carries. Undoubtedly they add effectiveness and value to the vehicle and are at the very least accessories of the vehicle. Thus, even if there was any difficulty in the inclusion of the plastic name plates as 'parts' of the motor vehicles, they would most certainly have been covered by the broader term 'accessory'. In this view of the matter, we are of the opinion that the Tribunal has erroneously come to the conclusion that 'plastic name plates' are not 'part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of something else, cannot be an integral part of the equipment but can only be an "accessory". Similarly, in the case of CCE, Calicut v. M/s. Keltron Components Complex Ltd. 2005 (191) E.L.T. 580 (Tri.-Bang.), Revenue's appeal was rejected by observing that the Commissioner (Appeals) has rightly observed that though the plastic crates are not used for manufacture of capacitors and resistors, they add to the convenience for collecting machine out put and shifting to the next stage of production and hence, they serve as aid for various machines and have to be held as "accessory". Reference may also be made to Hon'ble Rajasthan High Court decision in case of UOI v. M/s. Rishabdev Textiles - 2002 (141) E.L.T. 352 (Raj.), in which, after taking note of the definitions of expression "accessory" as appearing in various dictionaries, it was held that it is not the technical or scientific term and as such, the expression "accessory" has to be considered as it is ordinarily understood. Accordingly, the Hon'ble High Court held that the voltage regulator, which regulates the voltage of electricity supplied to the machine used for manufacture of final goods is an accessory to the machine an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in theory to do so, but is neither practical nor possible to do in the actual manner. The delivery of the raw material in time for increasing the effective working of the same and then removal of the finished goods from the vicinity of the machine contributes may be in a subordinate degree to attain a general result or effect. Same adds to definition of effectiveness of the machinery, and when viewed and judged in the light 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. 15. We may, at this stage, refer to the Tribunal's decision holding such plastic crates used as material handling equipment, as eligible capital goods for the purposes of Modvat credit, though some of the decisions are for the period when the definition of the capital goods as appearing in Rule 57Q was different. Nevertheless, the said decisions are relevant as the material handling equipment have been allowed credit by treating them as accessory. 16. In the case of M/s. Kellogg India Ltd. v. CCE, Mumbai-VIII - 2006 (196) E.L.T. 223 (Tri.-Mumba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmissibility of the credit as capital goods was not one of the issue before the Bench. As such, it can be recorded that M/s. PKPN Spinning Mills' case and followed subsequently in M/s. Sugavaneswara Spinning Mills' case, was by way of concession and M/s. Hindustan Seals judgment having not considered the availability of credit as capital goods, there is no decision holding against the admissibility of the plastic crates as accessory. In any case, having elaborately discussed as to what is the meaning and scope of the term "accessory", as interpreted by Hon'ble Supreme Court in various decisions and by Tribunal, it has to be held that the plastic crates are eligible capital goods for the purposes of Modvat credit. We answer accordingly. 20. We may examine the appellant's alternative claim of entitlement to credit of duty paid on the plastic crates as inputs. The definition of inputs as contained in Rule 2(g) is as follows :- "2(g) "Input" means all goods, except (light diesel oil) high speed diesel oil and motor spirit, commonly known as petrol, used in or in relation to the manufacture of final products whether directly or indirectly and whether contained in the final product or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been used to widen and expand the scope, meaning and content of the expression "inputs" so as to attract the goods which do not enter directly or indirectly into the finished product, but are used in any activity concerned with or pertaining to the manufacture of the finished goods. 23. By various decisions of the Tribunal, in number of cases, it has held that the equipment used for collecting, transporting or dispensing material being necessary for undertaking production, are required to be held as used "In relation to" the manufacture of the final product. Reference in this regard, is made to Tribunal's decision in the case of CCE Bangalore v. M/s. Anglo French Drugs & Indus. Ltd. - 2008 (225) E.L.T. 76 (Tri.-Bang.), in the case of CCE Rajkot v. M/s. Ajanta Transistor Clock Mfg. Co. - 2009 (233) E.L.T. 97 (Tri.-Ahmd.). In the later decision, Tribunal took note of the Hon'ble Supreme Court's decision in the case of M/s. Tata Engineering and Locomotive Co. Ltd. [2003 (158) E,L.T. 130 (S.C.)] holding that the bins, trolleys, etc. are entitled for the benefit of Notification No. 217/86-C.E., which exempts the goods used within the factory of production and observed that as the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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