ORDER
J.H. Joglekar, Member (T)
1. This appeal is against the order of the Collector dated 31-5-1994. The issue involved is whether plastic crates used for transportation of aerated waters are eligible inputs within the parameters of Rule 57A of the Central Excise Rules, 1944 or not.
2. The assessees were represented by Shri Dalip Singh, Consultant. The Revenue was represented by Shri Y.R. Kilayania, JDR.
3. Shri Dalip Singh argued that the crates were not merely used for transportation of the aerated waters to the market but were used in all stages of the manufacture inside the factory. He referred to and relied upon the order-in-appeal dated 11-5-1994 passed by the Commissioner in which it was held that plastic crates were eligible inputs for Modvat credit. Referring to Notification No. 36/95-C.E./ante, dated 17-11-1995, Shri Dalip Singh claimed that this notification specifically excluded crates and glass bottles used for aerated water. It must therefore, be argued that before such specific inclusion, these goods qualifies as inputs. He also cited various judgments of the Tribunal and of the courts in support of his arguments.
4. Shri Kilaniya, Ld. JDR claimed that the subject notification was isued in 1995 and had no bearing on the facts of the case where the order was passed in 1993. He claimed that crates could not be called the inputs in the manufacture of aerated waters. They were meant only for carriage of finished articles. He further claimed that the value of the crates was high when compared with the value of the finished articles. Modvat if made permissible on crates would result in higher outgo for the government.
5. Countering wth the argument of Shri Dalip Singh that the value of the crates was proportionally distributed over the value of the bottles containing aerated waters, he claimed that the judgment in the case of Jay Engineering Works as reported in 1989 (39) E.L.T. 169 should be the guiding judgment in this area.
6. We have carefully considered the arguments advanced by both the sides and have perused the various materials placed before us.
8. The term inputs has been amplified in the explanation to Rule 57 A. The extended definition includes “packaging materials”. The issue here is whether the crates which are fully finished articles and goods known in the market as such would qualify under the terminology “packaging material”.
9. The various citations made by the Ld. Counsel in so far as they define packaging material seem to go against his case. In the judgment in regard to Ponds India Ltd. Madras High Court, 1993 (63) E.L.T. 3 (Mad.), the Madras High Court has distinguished between the packaging material on one hand and packages or containers on the other. In the judgment, the judgment of the Tribunal in case of F.D.C. Ltd. reported in 1991 (55) E.L.T. 601 (Tribunal) has been cited. The relevant portion reads as under :-
“If the intention was only to permit ready to use containers such as boxes or bottles, then the term used would have been ‘package or container’. In the absence of any such restrictive meaning provided, the term ‘Packaging material’ has to be interpreted as such and cannot be interpreted in the restricted manner”.
10. Packaging materials are starting points for manufacture of boxes or containers. As such a wider purport cannot be given this term. It is clear that the crates which are the containers for transportation did not fall within the ambit of packaging material and as such would not qualify for the benefit of modvat credit.
11. We have carefully considered the submissions that a specific exclusion was made for crates and glass bottles only vide the notification dated 17-11-1995 and therefore its inclusion during the period prior to this inclusion would be (sic) We observe that crates did not ever qualify as inputs within the definition given under Rule 57A. This argument, therefore, is available to the assessee.
12. The issue of the admissibility as such having been so decided, there is no need to go into the issue as to whether value of the crate was taken into account for determining the assessable value of the aerated water or not.
13. In the result, the appeal fails and is rejected.
