TMI Blog2016 (11) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 266 - CHATTISGARH HIGH COURT] is squarely applicable in the present case where it was held that the item “Hot Melt Unit”was admittedly used by the assessee while packing their finished goods – “welding electrodes”. Since packing is held to be one of the essential components of the manufacturing process of the finished goods and being in the nature of incidental or/and ancillary to the main manufacturing activity, the assessee in this case was rightly held entitled to claim Modvat credit on the item- “Hot Melt Unit” treating the same as capital goods under the Rule 57Q ibid for claiming benefit. The packing is activity incidental or/and ancillary to the main manufacturing activity. Therefore, Cenvat Credit of duty paid on inputs used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 is decided through Order-in-Appeal No. 06-CE/APPL/MRT-I/2014 dated 13.01.2014. The said Order-in-Appeal dated 13.01.2014 is impugned order for Appeal No. E/53366/2014. 3. The brief facts of the case are that the appellants are engaged in the manufacture of sugar and they are availing Cenvat Credit of duty paid on inputs and capital goods. The appellants manufactured goods and packed them in 50kg. and 100kg. bags. Subsequently the production is entered in RG-1 Register. The assessee within the premise of their factory have separate place for packing of sugar into 1kg. packs and 5 kg. packs and the goods so packed were bearing brand name Shagun . Sugar packed in 1kg. and 5kg. packs is cleared from the factory on payment of duty. For pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct. The stage of manufacture in case of sugar in pack of1kg 5kg has been extended till such packing is completed in packing division of the factory. Therefore, Cenvat Credit availed on packing material is proper, correct and appropriate in law. They further contended that show cause notice was hit by limitation since the factory was visited by audit team in every year and duty was paid on the final product at the time of clearance and there was no intention to evade duty and that there has been no suppression of fact on their part. The Original Authority has held that the process of manufacture of sugar has its last stage in dryer house where the goods are bagged in 50 and 100 kgs packs. Subsequently, the assessee was removing sugar from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The appellant carried the matter before Commissioner (Appeals) on the similar grounds. The Commissioner (Appeals) through an Order-in-Original dated 13/01/2014 rejected the appeal filed by the appellants. 5. Aggrieved by above stated two Orders-in-Appeal, the appellant is before this Tribunal. The grounds of appeal inter-alia are that, it is erroneous to conclude that process of manufacture of sugar is complete when sugar is manufactured and entered in the daily stock register after packing in 50kg/100kg bags. It is further erroneous not appreciating that the goods have to be assessed in the condition in which the goods are cleared from the factory and that the show cause notice dated 06/03/2012 is hit by the bar of limitation and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for department supported the impugned Orders-in-Appeal. 8. We have considered the rival contentions. On perusal of show cause notice dated 16/03/2012, we find that the packing of sugar into 1 5 kgs pack is done in the factory premises. The goods when brought into such packing division are again entered into RG-I Register and subsequently packed into 1 5 kgs packs. The clearance of such goods from factory on payment of a specific rate of duty. The packing material on which Cenvat Credit was availed were used for packing of goods into 1 5 kgs. pack within the premises of factory. We find that the ratio of the ruling of Hon ble High Court of Chhattisgarh in the above stated case of Advani Oerlikon Ltd. is squarely applicable in the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, we find that the item Hot Melt Unit was admittedly used by the assessee while packing their finished goods welding electrodes . Since packing is held to be one of the essential components of the manufacturing process of the finished goods and being in the nature of incidental or/and ancillary to the main manufacturing activity, the assessee in this case was rightly held entitled to claim Modvat credit on the item- Hot Melt Unit treating the same as capital goods under the Rule 57Q ibid for claiming benefit. 14. In our view since the issue sought to be urged by the applicant (Revenue) no longer remains res integra and stands decided by the two decisions of the Supreme Court in favour of the assessee no referable questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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