Customs, Excise and Gold Tribunal - Tamil Nadu
Collector Of C. Ex. vs Venlon Polyster Film Ltd. on 8 January, 1999
Equivalent citations: 2000(117)ELT748(TRI-CHENNAI)
ORDER V.K. Ashtana, Member (T)
1. This is a Revenue Appeal against Order-in-Appeal No. 76/91 dated 21-3-1991 passed by the Collector (Appeals) and the issue involved is the availability of Modvat credit on packing materials like plywood planks used for packing of the final product i.e., Polyester films manufactured by the respondents.
2. Heard Shri S. Kannan, learned JDR who submits that the Or-der-in-Original denied Modvat credit both on plywood sheets as well as nails and the amount involved is Rs.1,01,253.63. The Order-in-Appeal impugned allowed the Modvat credit on plywood but upheld the dis-allowance of Modvat credit on the Iron nails. Learned JDR submits that the Revenue is aggrieved regarding allowing Modvat credit of plywood sheets on the ground that under Rule 57A of Central Excise Rules, 1944, the credit is available only on packaging materials used for packing of final products and not on the raw materials themselves which were first used for making the packing materials.
3. Heard Shri Jagadish H.S., the Senior Commercial Officer representing the respondents. He submits that the issue is already a covered one and the Hon'ble Tribunal in the case of Rasoi Ltd., as reported in 1990 (49) E.L.T. 522 has clearly held that the term "Packaging material" include even materials which are used to make such packages. In this case, the plywood is basically used to act as a stand for the roll on which the polyester films have been wrapped. Therefore the plywood sheet would qualify for the Modvat credit and to this extent there is no infirmity in the Order-in-Appeal. As far as the nails are concerned, the credit has already been reversed by them.
4. I have carefully considered the submissions on both sides and records of the case. I find that the availability of Modvat credit on packaging materials has been considered at length in the decision of the Hon'ble Tribunal in the case of Rasoi Ltd. supra. It has been held therein that the expression "Packaging materials" are different from the package or the container. An example has been given that though plywood is not package by itself, but it is a packaging material to make Tea chests. In view of such a wider view taken therein, the Tin plates/Tin sheets used for making metal containers in which vegetable product is ultimately packed have been held as eligible for Modvat credit. I also find that a similar view has been taken in the case of Parle Biscuits Ltd., as reported in 1994 (74) E.L.T. 603 (T) wherein packaging materials like Poster, Gum tapes and Self adhesive tape has also been held eligible for Modvat credit. I further find that in fact in this case the issue is still more to the advantage of the respondents in as much as that the plywood is actually not used to manufacture any boxes but is used as a stand to mount the rolls on which the polyester films are wrapped as final products. These rolls have to be stacked vertically and the horizontal stand made out of these plywood sheets are neeessary for the completion of the final product. Therefore taking into consideration all the submissions made and this fact of actual use of the plywood, I find that there is no infirmity in the Order-in-Appeal which compels me to interfere with the same. The Revenue Appeal is accordingly dismissed.