TMI Blog2003 (4) TMI 484X X X X Extracts X X X X X X X X Extracts X X X X ..... ng under Chapter sub-heading No. 5403.00 and availing Modvat credit under Rule 57A of Central Excise Rules, 1944. Credit on anti-static lubricating oil, bobbins, spools, caps and packing material for the final product was sought to be disallowed on the ground that the value of the above inputs was not included in the value of the final product manufactured by the respondents. Show cause notices were therefore issued for the recovery of different amount of Modvat credit from the various respondents, under Rule 57-I of the Central Excise Rules, 1944 read with Section 11A of the Central Excise Act, 1944. The notices were adjudicated by the Assistant Commissioner who confirmed the demands. The Commissioner (Appeals) set aside the orders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value has been fixed under sub section (2) of the Section 3 of Central Excise Act, 1944. Sub-sections (2) and (3) of Section 3 are reproduced as under :- Sub-section (2) of Section 3 : The Central Government may by notification in the Official Gazette, fix, for the purpose of levying the said duties, tariff values of any articles enumerated, either specifically or under general headings, in the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as chargeable with duty ad valorem and may alter any tariff values for the time being in force. Sub-section (3) of Section 3 : Different tariff values may be fixed - (a) for different classes or descriptions of the same excisable goods; or (b) for excisable goods of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 44, clearly stipulates that Modvat would not be available to the packaging material, the cost of which is not included or had not been included during the preceding financial year in the assessable value of the final product under Section 4 of the Act . According to this proviso in order to be eligible for Modvat the cost of inputs, packing material shall be included in the assessable value of the final product under Section 4 of the Central Excise Act, 1944. In other words, this proviso will be attracted and consequently benefit of the Modvat will be extended to inputs, packing materials if their cost is included in the assessable value of the final products (emphasis supplied) and not in other cases where duty on final products is leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing materials is available only in cases where final products is charged to ad valorem duty and not where tariff value is fixed for final products. Commissioner (Appeals) order as aforesaid is not on correct appreciation of the provisions of law. 4. I have heard both sides. There is no merit in the contention of the ld. SDR that Modvat credit is not admissible on inputs used in the manufacture of final products chargeable to rate of duty other than ad valorem rate, in the light of the Tribunal s orders in the case of CCE, Bhubaneswar v. Orissa Cement Ltd. [1994 (69) E.L.T. 537] wherein it was held that credit is admissible to packing materials used in final product chargeable to the specific rate of duty, and CCE, Jaipur v. Guljag Chemic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esent case, the Commissioner (Appeals) has recorded a finding that the tariff value is fixed having regard to the wholesale price for the product and it is therefore incorrect to say that the price of the input is not included in the tariff value. This finding is in consonance with the language of Section 3, sub-section (2) which provides for fixing levy of tariff value, and the finding has not been challenged with reference to any material to establish that the value of the packaging material was not taken into account while levying the tariff rate on the final product manufactured by the respondents. 6. In the light of the above discussion, I hold that there is no legal infirmity in the order of the Commissioner (Appeals) and accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
