Wide meaning of 'input' under exemption notification covers packing materials used with manufactured goods for proforma credit

Corrugated boxes used to pack manufactured goods were treated as "inputs" under Notification No. 201/79 because the term was given a wide meaning and was not confined to raw materials or components entering the finished product. The later narrowing of the concept, requiring goods to form part of the finished product, arose only from the amending Notification No. 105/82. Relying on prior Tribunal reasoning on packing materials such as wooden drums, the document states that packing material used in relation to the goods can qualify for proforma credit unless the notification expressly restricts the term.

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Issues: Whether corrugated boxes used for packing carbon elements and zinc elements could be treated as inputs for the purpose of Notification No. 201/79 dated 4th June, 1979 and qualify for proforma credit.

Analysis: The Tribunal followed its earlier view that the expression "input" in Notification No. 201/79 was of wide import and was not confined to raw materials or components entering into the composition of the finished goods. It noted that the narrower requirement that the goods must form part of the finished product was introduced only by the amending Notification No. 105/82 dated 28th February, 1982. The Tribunal also relied on its earlier decision treating wooden drums used for packing as inputs under Notification No. 178/77-CE, and found no reason to depart from those decisions.

Conclusion: Corrugated boxes used for packing were eligible to be treated as inputs under Notification No. 201/79, and the assessee was entitled to the benefit claimed.

Final Conclusion: The appeal succeeded and the assessee obtained consequential relief on the disputed credit claim.

Ratio Decidendi: For the relevant exemption notification, "input" includes packing material used in relation to the manufactured goods unless the notification itself expressly restricts the term.

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