Customs, Excise and Gold Tribunal - Delhi
Parle Biscuits Ltd. vs Collector Of Central Excise on 1 September, 1994
Equivalent citations: 1994(74)ELT603(TRI-DEL)
ORDER Shiben K. Dhar, Member (T)
1. Both these appeals involving the similar issue were taken up together and are being disposed of through this common order.
2. In case of E/166/91-NRB, the appellants have been denied modvat credit on base paper, printing ink and medium used in the manufacture of packing material for the biscuits. Similarly, in case of Appeal No. E/4304/91-NRB, appellants have been denied modvat credit on TDL Poster Paper, Glas-sine paper, printing ink, H.R. Media Ethyl/Butyl Acetate, Wax Poly Granules etc. used for printing and waxing of packing material.
3. Being aggrieved with the order of Collector (Appeals), the appellants have came up through these appeals before the Tribunal.
4. Ld. Advocate for the appellant Shri Harbans Singh submitted that eligibility of modvat on such inputs has been upheld in a number of decisions. He cited the cases of Britannia Industries Ltd. v. CCE 1993 (67) E.L.T. 980 (Tribunal], East End Paper Industries Ltd. v. Collector 1989 (43) E.L.T. 201 (SC), Parle Products Ltd. v. Collector 1992 (57) E.L.T. 152 (Tri), Ponds India Ltd. v. Collector 1993 (63) E.L.T. 3 (Mad.), Multilayer Composites Pvt. Ltd. v. CCE 1993 (65) E.L.T. 565 (Tri). He submitted that in case of Multilayer Composites Pvt. Ltd. (supra) modvat was allowed in Printed Plastic Films and the Printing ink.
5. Ld. Jt. CDR Shri M.M. Mathur on behalf of the Revenue fairly conceded that packing material as such were eligible for modvat credit but submitted that this credit can be extended only to packing material as such and not to the inputs like ink, wax etc. going into manufacture of packing material. He submitted that in case of Park Products (supra), inks were not held entitled to the benefit of Modvat credit.
6. We have given careful consideration to the submissions made by both sides. Tribunal in case of Park Products (supra) held that plain paper and aluminium foil being 'packaging material, has been considered as inputs to which benefit of Modvat would be available. Printing ink and other chemicals used for lamination only are inputs for packaging material and not for final products, cannot be allowed the benefit of modvat. This order specifically discussed the case of East End Paper Industries Ltd. (supra) and observed that analogy of wrapper paper cannot be applied to chemicals such as printing ink as Hon'ble Supreme Court have not gone into question of considering whether printing ink and other lamination materials are also component of paper. In case of Britannia Industries Ltd. (supra) the question again relate to eligibility to Modvat on Grey Board, Glassine Papers, G.P. Papers, Sulphite papers etc. The case of Multilayer Composite Pvt. Ltd. (supra) on which heavy reliance has been placed by the Ld. Advocate is distinguishable. In this case, printing ink is used as an input in the manufacture of plastic film. Since the final products were printed plastic film and ink was used to complete the manufacture, the benefit of Modvat was allowed. This is not the position in the present case. Printing ink and other materials are used as input for packaging material and not for final product. Modvat is allowable only on packaging material and not on other products like ink etc. We therefore, hold that modvat benefit is available only for TDL Poster Paper and Glassine paper figuring against S.No. 16 and 17 of the Declaration dated 1-3-1987 in Appeal No. E/166/91-NRB.
7. In case of appeal No. E/4304/91-NRB modvat has been denied in case of TDL Poster papers, OLB paper (Glassine), printed ink, H.R. Media Ethyl/Butyl Acetate, Wax, Cello Solve, Poly Granules, Fevicol Gum Tape and Adhesive tape etc.
8. For the reasons stated above, we hold that Modvat will be available only for TDL Poster paper, OBL(Glassine) papers, gum tape, Self-adhesive tape figuring against S. No. 16,17,26,27 in declaration dated 10-8-1990 and Modvat will not be available in case of materials like printing ink etc.
9. Both the appeals are partly allowed to the extent indicated above.