Customs, Excise and Gold Tribunal - Tamil Nadu
Recon Pharma (P) Ltd. vs Collector Of Central Excise on 25 November, 1992
Equivalent citations: 1993ECR203(TRI.-CHENNAI), 1993(65)ELT463(TRI-CHENNAI)
ORDER S. Kalyanam, Member (J)
1. Since a common issue arises for determination in both the appeals they are taken up together and disposed of in a common order.
2. The short question that arises for consideration in the appeals is whether the appellant would be entitled to take MODVAT credit on plain aluminium foil which was received as an input for packing tablets and capsules which the appellant had sent out for printing, under Rule 57F(2) of the MOD-VAT Rules.
3. Shri Sampath, the learned Counsel for the appellant contended that aluminium foil received was sent out as aluminium foil and received back as aluminium foil and the input which was sent out with permission as per the rules for the limited purpose of printing the name of the capsules and other particulars would not change the character of the imput as such and being a packaging material the inputs would be entitled to MODVAT credit. The learned Counsel further submitted that the rulings of Special Bench in the following cases would clearly govern the issues in the present case in favour of the appellant:
(i) Order No. A/44/92-NRB, dt. 29-1-1992 - Indian Shaving Products Ltd. v. CCE 1991 (61) E.L.T. 747 (Tri.)
(ii) Order No. 832-33/91 WRB, dt. 24-4-1991 FDC Ltd. v: CCE 1991 (55) E.L.T. 601 (Tri.)
(iii) Order No. 1764/90/WRB, dt. 22-10-1990 Parle Products Pvt. Ltd. v. CCE 1992 (57) E.L.T. 152 (Tri.)
(iv) Order No. 153(A) Cal/90-153(C), dt. 7-2-1990/15-3-1990 Rasoi Ltd. v. CCE 1990 (49) E.L.T. 522 (Tri.) The learned Counsel further submitted that the Division Bench of the Madras High Court in the case of Ponds India Ltd., 1993 (63) E.L.T. 3 (Mad.) arising out of a referential jurisdiction has taken the view that the duty paid inputs for packing material received by the manufacturer and sent out for conversion by job worker into bottles and container would be eligible for MODVAT credit.
4. Heard Shri Jeyaseelan, the learned D.R.
5. We have gone through the submissions made before UK. In our view the ratio of the decision cited supra would be applicable to the issues arising for determination in the present cases and we note that even at the time of disposal of the stay petition we have observed as under :
"The admitted position is that both the aluminium foil and the finished product are notified under Rule 57A and the applicants have filed a declaration in this regard. The question therefore, that arises is whether the aluminium foil which was brought in terms of Rule 57F(2) can be treated as input which is used in or in relation to the notified finished product. Rule 57A specifically provides for the MODVAT credit to be given in respect of packing material except those categories which are excluded. It is admittedly not one of the excluded categories of packing material. The aluminium foil ultimately gets used for packing the capsules and tablets in the applicant's factory. The question, therefore, that has to be considered is whether by virtue of multiple use can it be held that this cannot be considered as input with reference to the finished product of the applicants. There is no warrant under law to interpret the entry in regard to any specified material mentioned in the Notification to be such that they should be exclusively used for the manufacture of specified finished product. Once it can be shown that item is capable of being used as packing material, it becomes eligible for the purpose of MODVAT credit. In the present case the aluminium foil admittedly is used as an input for packing purposes. We are not able to appreciate the rationale that on printing the applicants' product becomes another finished product. It is not the case of Revenue that by printing the product has acquired a new name as known to the Trade or is amenable to any use other than that as claimed. The Hon'ble Supreme Court has clearly held in the case of J.K. Paper Mills and Eastend Paper Industries that the goods which are used in relation to the manufacture of finished product till the stage when they are rendered fit for marketing have to be treated as inputs used in or in relation to the manufacture of finished product."
We also take note of the recent Division Bench ruling of the Madras High Court in the case of Ponds India Ltd. referred to supra. Taking all these factors into consideration we hold that the appellant would be entitled to take MODVAT credit and the benefit of Rule 57F(2) in respect of the inputs in question and in this view the impugned order is set aside and the appeals are allowed.
V.P. Gulati, Member (T)
6. I agree that the appellant would be entitled to MODVAT credit and also facility under Rule 57F(2) for the reason set out in my observation in the Tribunal's Order S/210/92 dated 7-4-1992 passed while disposing of the stay application. This observation is reproduced in para 5 of the order recorded by my learned brother above.