CENVAT credit on plastic crates used for internal factory transport and storage was upheld as admissible inputs.

CENVAT credit on plastic crates used for internal transportation and storage of raw materials and finished goods within the factory was held admissible as inputs or material handling devices. The reasoning followed the Larger Bench view that such crates function as accessories supporting storage and movement in the manufacturing process, and the credit was claimed as inputs rather than capital goods. Credit could not be denied merely because the crates were classifiable under Chapter 39, since proper storage and transportation within the factory were treated as part of manufacture. The Revenue's challenge failed and the credit was allowed.

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Issues: Whether CENVAT credit on plastic crates used for transporting and storing goods within the factory was admissible as inputs or material handling equipment.

Analysis: The plastic crates were used for internal transportation of raw materials and finished goods, and the finding of the Larger Bench that such crates function as accessories/material handling devices was followed. The Court also noted that the respondents had availed credit as inputs and not as capital goods. On that basis, and in light of the consistent view that proper storage and transportation within the factory are part of the manufacturing process, the credit could not be denied merely because the goods were classifiable under Chapter 39.

Conclusion: The CENVAT credit on plastic crates was admissible, and the Revenue's challenge failed.

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