Input goods under excise notification include packing materials tied to marketability, but not outer transport cartons.

Printed boards used to affix snap fasteners and the boxes used for the initial packing of needles were treated as input goods under Notification No. 201/79-C.E. because they were used in a process incidental or ancillary to making the product marketable; relief was available for such items up to 28-2-1982. Cartons and outer boxes used only for subsequent packing and transport were outside the notification, as they did not form part of the manufactured article's marketable preparation; no relief was available for them. The governing distinction was between materials connected with completion and marketability of the goods, and materials used merely for transport convenience.

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Issues: (i) Whether printed boards and the boxes in which needles are initially packed qualified as input goods under Notification No. 201/79-C.E. for purposes of proforma credit and consequential relief; and (ii) whether cartons or boxes used only for subsequent packing and transport also qualified for the same relief.

Issue (i): Whether printed boards and the boxes in which needles are initially packed qualified as input goods under Notification No. 201/79-C.E. for purposes of proforma credit and consequential relief.

Analysis: The relevant test under the notification, as applied in the earlier Tribunal decisions relied upon, was whether the goods were used in relation to the manufacture or completion of the product in a manner connected with making the goods marketable. The printed boards were necessary for affixing snap fasteners, and the boxes were necessary for packing needles before sale. They were therefore used in a process incidental or ancillary to completion of the manufactured product and fell within the concept of input goods under the notification as it then stood, before the amendment brought in by Notification No. 105/82.

Conclusion: The claim succeeded for printed boards and the boxes in which needles were initially packed, and relief was allowable upto 28-2-1982.

Issue (ii): Whether cartons or boxes used only for subsequent packing and transport also qualified for the same relief.

Analysis: Cartons or boxes used after the initial packing of the goods did not form part of the goods' marketable preparation in the relevant sense and served only the purpose of easier transport. They did not enter into the character of the manufactured articles and were outside the scope of input goods contemplated by the notification.

Conclusion: The claim failed in respect of cartons and subsequent outer boxes, and no relief was allowable for them.

Final Conclusion: The appeal succeeded only to the limited extent of granting notification-based relief for the printed boards and the initial packing boxes, while denying the benefit for subsequent cartons and transport boxes.

Ratio Decidendi: Goods used in a process incidental or ancillary to making the manufactured product marketable may qualify as input goods under the notification, but articles used merely for subsequent transport packing do not.

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