Needle Industries (India) Pvt. … vs Collector Of Central Excise on 28 April, 1987

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Customs, Excise and Gold Tribunal – Delhi
Needle Industries (India) Pvt. … vs Collector Of Central Excise on 28 April, 1987
Equivalent citations: 1990 (46) ELT 525 Tri Del


ORDER

V.T. Raghavachari, Member (J)

1. Under letter dated 10-9-1981 the Deputy Collector of Central Excise Coimbatore intimated the appellants M/s. Needle Industries (India) Pvt. Ltd. that permission sought for by them to avail proforma credit on the duty paid on printed boards and card board boxes with reference to the needles, snap fasteners, pins, etc. manufactured by them, and falling under TI 68 GET, was not permissible. The appeal against the said order was dismissed by the Appellate Collector under his order dated 9-2-1982. The appellants preferred a revision petition to the Central Government against the said order. On transfer thereof to this Tribunal the same is now before us as this deemed appeal.

2. The appellants have indicated by their letters dated 21-1-1987 and 25-2-1987 that he will not be appearing in person. Accordingly we have heard Shri Vineet Kumar for the department and have perused the records.

3. As mentioned earlier the letter of the Deputy Collector dated 10-9-1981 was in response to a letter by the appellants dated 29-9-1981 under which they had sought for permission to avail proforma credit, evidently under Rule 56-A of the Central Excise Rules. In their revision petition the appellants, apart from pressing for the said claim, have raised a further contention that cartons/boxes and the printed boards would be inputs in terms of Notification 178/77-C.E., dated 18-6-1977 and Notification 201/79- C.E., dated 4-6-1979 and they would therefore be entitled to relief at least under the said notifications. This plea of relief under these notifications is not on the basis of fresh facts but on the basis of facts that were before the lower authorities themselves. Hence this aspect of the case has also to be looked into in this appeal.

4. The appellants are manufacturers of knitting needles, pins, snap fasteners, suture needles, etc. The snap fasteners are evidently fixed to printed boards. The needles as well as these printed boards are evidently subsequently packed in boxes and then into cartons. It is not very clear from the records as to whether relief was being claimed with reference to the printed boards and the boxes in which these printed boards as well as needles are initially packed or whether it is claimed with reference to the cartons in which these boxes are subsequently packed. It is therefore necessary to consider the case of the appellants with reference to the boards, boxes and cartons.

5. The question of the eligibility for benefit under Notification 178 of 77 as also 201 of 79 had come up for consideration before this Tribunal in several earlier decisions. They are:

(i) Hindustan Liver Ltd. v. Collector of Central Excise – 1985 (19) ELT 96.

(ii) Madura Coats v. Collector of Central Excise – 1985 (22) ELT 94.

(iii) Seshasayee Paper and Boards v. Collector of Central Excise – 1985 (22) ELT 163.

(iv) Andhara Sugar Ltd. v. Collector of Central Excise – 1985 (22) ELT 594.

(v) Carbon Industries (Pvt.) Ltd. v. Collector of Central Excise – 1986 (22) ELT 961; and

(vi) M/s. Shri Ram Rayons v. Collector of Central Excise – 1987 (30) ELT 850 (Tribunal) : Order No. 208/87-C in Excise Appeal No. 104/83-C.

6. The contention for the department has in all the above cases been that in order to be classified as input goods in terms of the said notifications they should enter into the character of the manufactured goods by way of ingredients or components. Incidentally we may note that this concept of the input goods being raw materials or component parts in order to qualify for benefit under the Notification 201 of 79 was built into the notification by way of amendment Notification 105/82 dated 28-2-1982. Therefore the situation from 28-2-1982 may not be the same as the situation before the amendment of that date. In the present instance it may be noted that the printed boards or boxes or cartons do not enter into the character of manufactured articles (that is) needles, snap fasteners, etc. Therefore the eligibility for benefit in respect thereof under Notification 201/79 can extend upto 28-2-1982 only and not thereafter.

7. So far as the decisions mentioned earlier the decisions in 1985 (22) ELT 94; 1985 (22) ELT 163 and 1985 (22) ELT 594 may not be very relevant for the present purpose since the input goods therein were not in the nature of the goods now before us but had been actually used up during the course of manufacture of the concerned product, the only question having been whether they had actually entered into the character of the product or merely assisted in the process of manufacture. The other three decisions in 1985 (19) ELT 96; 1986 (26) ELT 961 and Order No. 208/87-C dealt with a situation similar to the present situation. It has been held in the said decisions that so long as the input goods were necessary to be used for making the manufactured goods marketable the input goods could be said to have been used in a process incidental or ancillary to the completion of the manufactured product and hence they would be entitled to benefit under Notification 201/79 as it originally stood. In the present case the snap fasteners could certainly not be marketed until affixed to printed boards and the needles could not be marketed loose but will have to be packed in boxes before being marketed. Hence so far as the printed boards and boxes in which the needles are packed they would be input goods as defined in Notification 201/79. But the same may not be the case in respect of cartons or boxes in which the printed boards or the needle boxes are subsequently packed, since these would be required only for the purpose of ease of transport.

8. Accordingly we hold that the appellants should be entitled to relief under Notification 201/79 till 28-2-1982 in respect of the printed boards (in which the snap fasteners are fixed) and the boxes (in which the needles are initially packed) but not in respect of boxes or cartons in which these are subsequently packed. The appeal is accordingly allowed to the said extent and the orders of the lower authorities are modified in the said manner.

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