TMI Blog2013 (9) TMI 818X X X X Extracts X X X X X X X X Extracts X X X X ..... OF PUNJAB & HARYANA AT CHANDIGARH ] - Under Rule 57A of the Rules, Modvat credit was admissible on the specified inputs used in the manufacture of final product - Explanation (iii) to Rule 57A of the Rules define that inputs does not include packaging material if its value had not been included during the preceding financial year in the cost of assessable value - The Tribunal had categorically found as a fact that the cost of packing material had been included in the assessable value although on installment basis and, therefore, the assessees’ were entitled to Modvat credit of duty. The plea taken by the assessees’ that the cost of glass bottles and plastic crates was included in the aerated water could not be rebutted by the revenue. Overriding Effect of Section 4 - Whether the provisions of Rule 57A of the Central Excise Rules, 1944 can override the provisions of Section 4 of the Central Excise Act, 1944 - Whether the Hon’ble Tribunal was correct in holding that the assessee was entitled to claim modvat credit by exercising his option to include the value of the durable and returnable packaging material or container in spite of the fact that such packaging material of containe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uperintendent of Central Excise, Range-D/8 upon the respondent no.1 for disallowance of modvat credit availed against the receipt of the Glass Bottles which is durable and returnable in nature and could not be added to the assessable value of the final product. It was contended that the said Glass Bottles though meant for packing attracts advalorem rate of duty with effect from 01.03.1994 and as per the provisions of Section 4 (4) (d) (I) of the Central Excise Act, 1944, the value thereof could not be added to an assessable value of the final product. The Assistant Commissioner of Central Excise, Calcutta Division disallowed the modvat credit and ordered for its reversal. The respondent no.1 appealed against the said order before the Commissioner (Appeals) of Central Excise, Calcutta which also suffers dismissal. Against the said appellate order, an appeal was filed before the CEGAT by the respondent no.1 which was subsequently allowed and the order of the assessing authority and the appellate authority were set aside. The Tribunal by the said order not only dispossess of the appeal filed by the respondent no.1 but other two appeals against the order of relating to the allowing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal filed by the respondent no.1 and the order by which an application for reference of questions of law to the High Court is rejected, the petitioner has filed the instant writ petition. At the very outset, the respondent no.1 took a preliminary objection that the instant writ petition is not maintainable in view of Section 35J of the said Act as the same is required to be heard by a bench of not less than two Judges of the High Court. In reply to the aforesaid preliminary objection, the petitioner says that the provision under Section 35J can only be pressed when the case has been referred to the High Court under Section 35G of the said Act and not otherwise. On noticing the provisions contained under Section 35J, the aforesaid provisions can be made applicable when any case has been referred to the High Court under Section 35G but it does not contemplate a situation where the Tribunal refuses to refer the case to the High Court and, therefore, it cannot be said that the writ petition is not maintainable. The learned Advocate appearing for the petitioner, however, submits that Section 4 (3) of the said Act provides for non-applicability of this section in respect of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al products. The circular further clarified that the claim of modvat credit depends upon the fact of the each case and the authority must ascertain while allowing and/or disallowing the modvat credit. The questionnaire put in a show cause notice that whether the cost of packing charges are collected as declared in the price less, there was a specific answer that the said Glass Bottles and Crates have a limited life and the price is loaded to the cost on a prorata basis. It is not undisputed that the Modvat credit was allowed on inclusion of the prorata cost of the Bottles and Crates previously. A certificate by a Charter Accountant was also submitted to suggest that the cost of the Bottles and Crates being the integral part of the cost of production have been included in the cost of production on the basis of loss of Bottles and Crates during manufacturing operation handling within the factory premises. According to the petitioner, the circular dated 13.09.1995 is contrary to Section 4 (4) (d) (I) of the Act and, therefore, the Tribunal should have referred the question of law to the High Court under Section 35G of the Act. The petitioners bone of contention is that the rules or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Board regarding classification if Section 37B is not to be reduced to a dead letter. At the same time it cannot be lost sight of that several decisions noted above have held that Central Excise Officers acting quasi-judicially must exercise their independent judgment. 18. In my view the principles that emerge from the aforesaid decisions read in the light of Section 37B of the Act are: (1) There is a distinction between a decision in a particular assessment by a quasi-judicial authority and a decision on principle by the Board. While an instruction issued under Section 37B cannot be binding upon a quasi-judicial authority under the Act, the departmental officers conducting the lis before such quasi-judicial authority cannot take a stand contrary to the directive/instruction issued. (2) The instructions which may be binding on the Central Excise Officers are not binding on the Assessee who may question the correctness of the same before a quasi-judicial authority and before a Court. Both the quasi-judicial authority and a fortiori, the Court, can question the correctness of the instructions. (3) An assessee has on the other hand the right to claim and the Court may co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... categorically found as a fact that the cost of packing material has been included in the assessable value although on installment basis and, therefore, the assessees are entitled to Modvat credit of duty. The plea taken by the assessees that the cost of glass bottles and plastic crates was included in the aerated water could not be rebutted by the revenue. The same view is expressed in another judgment rendered in case of Commissioner of Central Excise, Chandigarh-I vs- Kandhari Beverages Ltd reported in 2008 (223) ELT 147 (P H) that if the value of the Glass Bottles and Plastic Crates are included on a prorata basis in the assessable value of the aerated water, it satisfies the Recruitment of Rule 57A of the Central Excise Rules 44 in these words: 4. It has been categorically found that in the instant case also the assessee had submitted a Chartered Accountant s certificate proving clearly that the value of glass bottles and plastic crates was on pro rata basis included in the assessable value of aerated waters, which satisfy the requirement of Rule 57A of the Central Excise Rules, 1944. Once the aforementioned finding of fact has come then there is no scope left for us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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