Packing materials cleared as such were held non-dutiable, with related excise issues remanded for fresh examination.

Packing materials received with inputs and later cleared as such were treated as not liable to central excise duty, following the settled position in West Coast Industrial Gases Ltd. and the CBEC circular dated 6.6.2003. The Tribunal held that no duty was payable on such clearances. The appeal succeeded to that extent, while issues concerning converted drums, captive consumption, applicability of Notification No. 67/95-CE, and duty on scrap were remanded for fresh examination.

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Issues: Whether the packing materials of inputs cleared as such were dutiable.

Analysis: The clearances related to packing materials received along with inputs and subsequently cleared without being subjected to further duty. Reliance was placed on the settled position reflected in the Supreme Court decision in West Coast Industrial Gases Ltd. and the CBEC circular dated 6.6.2003. On that basis, the Tribunal held that such packing materials of inputs were not liable to central excise duty.

Conclusion: The packing materials of inputs cleared as such were held not dutiable, and no duty was payable on those clearances.

Final Conclusion: The appeal succeeded to the extent of the demand on packing materials of inputs, while the issues relating to converted drums, captive consumption, applicability of Notification No. 67/95-CE, and duty on scrap were sent back for fresh examination.

Ratio Decidendi: Packing materials of inputs cleared as such are not liable to duty when the applicable legal position treats such clearances as non-dutiable.

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