ORDER
R. Jayaraman, Member (T)
1. All the captioned three appeals are against the common Order-in-Appeal No. A-2/93, dated 22-1-1993 passed by the Collector of Central Excise (Appeals), Pune.
2. The facts of the case are that the appellants are engaged in the manufacture of telephone cables. These cables are wound on wooden drums and marked with particulars of name of the manufacturer, length, quantity and other specifications as required by the Telecommunication Department. For this purpose, inter alia, they also brought in ‘oil paints’ under modvat scheme. There is no dispute that this oil paint was declared as input used in the manufacture of these cables. However, the Department objected to the avail-ment of modvat credit and issued 3 show cause notices alleging that paint is not used in or in relation to the manufacture of the final product and hence in that view sought to deny the modvat credit of duty taken on the paints used in marking the wooden drums. The Asstt. Collector confirmed these show cause notices. On appeal before the Collector (Appeals), their appeals were rejected. Hence, they are before us in the aforesaid 3 appeals.
3. After hearing both the sides, the undisputed factual position is that the paint is used in marking of wooden drums used for purpose of winding the cables. These drums are packing material of the cables. Apart from the requirements of the contract of the Telecommunication Department, even as per the provisions of Rule 51 of the Central Excise Rules, the excisable goods after they are packed and weighed in the factory or otherwise made ready for removal from the factory, are required to be marked on each wholesale package, in a clearly legible manner, the particulars of batch Number, a running serial number, number of retail packages contained in each wholesale package and distinguishing letters and other markings required for identification of the goods. Hence, even under the Central Excise Law, such markings are required to be made on the wholesale packages in the form as cleared from the factory. Here in this case, telephone cables are despatched on wooden drums, which are required to be marked even as per the provisions of the Central Excise Rules, apart from the requirement of the contract for giving additional particulars. Hence, the goods could not have been marketted and could not have been removed from the factory without these markings clearly made on the wooden drums. The Apex Court in the case of East India Paper Industries have held that the goods going into the streams upto the stage of clearance from the factory should be construed to be used in the process of manufacture. We, therefore, do not find acceptance of the findings of the authorities below holding that the paint is used only for marking of the drums and not actually used in the painting of the final product. It is also pleaded by the ld. JDR that it is not used for painting the cable and it cannot be construed to be a packing material. Both these objections are to be recorded for rejection, because of the fact that cables per se cannot be marked with these particulars. Markings can be done only on the outer packing; that is, what is contemplated even under Rule 51 of the Central Excise Rules. The appellants do not claim that paint is a packing material. They claim that it is an input necessary for marking excisable product for bringing it into the market from the factory gate. Hence, these objections are not acceptable to us. We allow all the three appeals, with direction to restore the modvat credit, disallowed by the lower authorities.