Modvat credit on plastic bottle closures upheld where the declared input covered the packing component used for aerated water.

Modvat credit was examined for plastic closures used as caps on plastic bottles for aerated water where the Rule 57G declaration mentioned PET preform. The declared input was treated as covering the plastic closures because they formed part of the bottle packing, and the order allowing credit was found free from infirmity. Credit on the plastic closures was therefore held admissible, and the Revenue's challenge failed.

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Issues: Whether Modvat credit was admissible on plastic closures used as caps for plastic bottles when the declaration filed mentioned PET preform.

Analysis: The declaration under Rule 57G of the Central Excise Rules specifically mentioned PET preform for availing credit. The plastic closures were used as caps of the plastic bottles and formed part of the bottle packing used for aerated water. On that basis, the declared input was treated as covering the caps also, and no infirmity was found in the order allowing credit.

Conclusion: Modvat credit on the plastic closures was held admissible and the Revenue's appeal failed.

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