1997 (1) TMI 398 - AT - Central Excise

Tribunal denies Modvat credit for aluminium cores, deeming them durable packing material, not production input.

The Tribunal upheld the lower authorities' decision, ruling that the cost of aluminium cores used for winding aluminium foil was not eligible for Modvat ... Modvat/Cenvat - Modvat on inputs - Returnable packing Issues:- Eligibility of Modvat credit on aluminium cores used for winding aluminium foil.Analysis:The appeal was filed against an order dismissing Modvat credit on aluminium cores used for winding aluminium foil. The appellants argued that aluminium cores are essential inputs for the final product, aluminium foil, as it cannot be marketed without winding on the cores. They also presented a declaration and a certificate from a Chartered Accountant to support their claim. The counsel relied on Supreme Court decisions to establish that aluminium cores are component parts of the final product and essential for marketability. Additionally, they argued that even if considered packing material, Modvat benefit should apply. The respondent, however, supported the lower authorities' findings.The Tribunal considered whether aluminium cores are eligible for Modvat credit. Despite the appellants' arguments, the lower authorities had found that the cost of aluminium cores was not included in the assessable value of the final product. The appellants failed to provide an approved price list by the department to dispute this finding. The Assistant Collector noted that the aluminium cores were returnable based on sales invoices and appellants' admission. The Tribunal distinguished the case law cited by the appellants, emphasizing that the situation here involved durable, returnable packing material. Consequently, the Tribunal upheld the lower authorities' decision, stating that the cost of aluminium cores was not part of the assessable value of the final product, leading to the dismissal of the appeal.