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TMI Blog2009 (6) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... al held the plastic dropper packed in the pediatric drops and marketed at the factory gate in the condition could be construed to be an input used in or in relation to the manufacture of the final product as laid down in Rule 57A of the Central Excise Rules – credit is allowable. - 2 of 2002 - - - Dated:- 10-6-2009 - F. I. REBELLO and J. H. BHATIA, JJ. Mr. P. S. Jetly with Mr. Rajinder Kumar, Advocates for the applicant. Mr. Prakash Shah with Mr. J. Sanghvi i/b. PDS Legal, Advocates for the respondents. [Judgment : Per J.H.Bhatia, J.] - To state in brief, the respondents are manufacturers of Pharmaceutical product falling under Chapter 30 of the Central Excise Tariff Act, 1985. They inter alia manufacture Pediatric drop for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x Court in Eastern Paper Ind. 1989 (43) ELT 201(SC) and Jay Engineering Works 1989 (20) ECR-3 (SC) and having regard to the concept of the value addition envisaged in the modvat scheme, is correct in holding that plastic dropper packed in the pack of pediatric drops and marketed at the factory gate in that condition could be construed to be an input used in or in relation to the manufacture of final product, as laid down in Rule 57A of central Excise Rules, 1944 ?" 4. Heard the learned Counsel for the parties. 5. According to the applicant i.e. Revenue, the dropper is not used either in manufacture or in relation to the manufacture of pediatric drops. It is merely placed in the cartons along with the sealed bottle of drops. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le dispensing measure made of transport clear plastic along with the bottle in a carton for proper dispensing of the drug. It is contended that this direction from the Drug Controller of India is binding and the respondents are bound to follow the same. Hence on this ground, modvat credit is required to be allowed in respect of the duty paid on the said droppers. 7. Under Rule 57A of the Central Excise Rules, 1944, provision is made for giving credit of the duty paid on the excisable goods used as inputs for such excisable goods or final products as may be specified by the Central Government by a Notification in the Official Gazette. Rule 57A reads as follows :- "RULE 57A. Applicability - (1) The provisions of this section shall app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rketing of the drug and therefore, the said material will be covered by the words "packaging material" and therefore they should be deemed to have been used for the manufacture of the final product because the final product cannot be marketed without such droppers in view of the directions given by the Controller of Drugs for India. There is no dispute that the medicine or the medicament involved in the present case fall under Heading 30.00 in Chapter 30 of the Central Excise Tariff of India which deals with pharmaceutical products. Note 5 to the said Chapter 30 reads as follows :- "5. In relation to products of heading No. 30.00, conversion of powder into tablets or capsules, labelling or rebelling of containers intended for consumers an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the drug manufacturers have to take such advice/direction seriously. For the administration and dispensation of the pediatric drugs in the desired quantity as prescribed by the medical practitioners, it is necessary that the container containing the medicine should be accompanied with some suitable measure having clearly visible markings on the same. This necessity has been emphasised in the advice given by the Drug Controller of India. 9. The learned Senior Counsel for the respondents demonstrated before us by showing a carton containing "Novamox Pediatric drops" that the drug is in powder form and the bottle containing the drug is originally closed with a cap having screws and it is accompanied by a plastic dropper with similar cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late on the fan, the Supreme Court held that in view of this, the name plates are essential for marketing of the fan even though the electric fan may preform its essential functions without affixation of the nameplate but that is not enough because electric fan does not become marketable product without affixation of nameplate. Therefore, it was held that the manufacturer was entitled to set-off of duty on the nameplates as an input of fans. In Collector of Central Excise versus Eastend Paper Industries Ltd. 1989 (43) ELT 201 (S.C.), it was held that since paper is marketed in packed or wrapped condition, the wrapping paper used in wrapping of paper, it is to be treated as raw material or component part for other variety of paper which ..... X X X X Extracts X X X X X X X X Extracts X X X X
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