Customs, Excise and Gold Tribunal - Calcutta
M/S Harbans Lal Malhotra & Sons Ltd. vs Cce, Calcutta-Iii on 3 September, 2001
ORDER
Smt. Archana Wadhwa
1. The Prayer in the application is for dispensing with the condition of predeposit of an amount of Rs. 2,31,682/- (rupees two lakh thirty one thousand six hundred and eighty two) confirmed against the appellant as disallowed modvat credit and penalty of Rs. 5,000/- (rupees five thousand).
2. I have heard Shri B.N. Chattopadhyay, ld. consultant for the appellant and shri A.K. Chattopadhyay, ld. JDR for the Revenue.
3. The short point involved in the present appeal is as to whether the hanging cards on which the appellants attaches the small packets of blades consisting of five blades each have to be considered as a packing material and dmissible modvatable inputs. The authorities below have held that such hanging cards on which blades are used are displayed in the shops meant for retain sale, same have to be considered as advertisement materials. On the other hand the appellants' contention is that it is their usual mode of clearance of the blades by attaching the same in the hanging cards which are further folded. Drawing my attention to the provisions of rule 57B(ii) it is submitted that the value of these packing materials is added in the value of the blades and this fact is not disputed by the authorities below. The deptt. has referred to the Tribunal's decision in the case of Ajanta Print Arts v. CCE -1998(98) ELT 406 holding such hanging cards as articles of print industry and fall under chapter 49 and not under chapter 48. Shri Chattopadhyay's contention is that the said decision is not applicable in this case inasmuch as it is not a case of classification of hanging cards but the issue relates to admissibility of the modvat credit. Accordingly provisions of modvat credit have to be interpreted and made applicable. In any case the invoice showing the clearance of this hanging cards reveals that the same have paid duty under chapter 48. The central excise officers having jurisdiction over the appellants' factory cannot deny them the modvat credit by changing the classification list at the manufacturers' end.
4.I find force in the above submissions of the appellant. Rule 57B(1)(ii) allows the manufacturer to take credit on the packing materials provided the cost of such packing material is included in the value of the final product. there is no dispute about the fact that such hanging cards to which the small packets of blades are attached and which are further folded are being used as packing material by the appellants in majority clearances. And their value is included in the value of the blades. The above contention raised by the appellant before the authorities below have not been rebutted by them. Ld. JDR is also agree to the above fact. As such I find that the appellants have made out a prima facie case in their favour so as to allow the stay petition unconditionally. I order accordingly and fix the main appeal on 25.9.2001.
Dictated in the court.