1993 (6) TMI 160 - AT - Central Excise

Aerated water manufacturers eligible for Modvat Credit on glass bottles without original packing

AMRITSAR BOTTLING CO. Versus COLLECTOR OF CENTRAL EXCISE

AMRITSAR BOTTLING CO. Versus COLLECTOR OF CENTRAL EXCISE - 1993 (68) E.L.T. 140 (Tribunal) Issues:Eligibility for Modvat Credit on glass bottles received by aerated water manufacturers through endorsed gate passes without original packing.Analysis:The judgment revolves around the eligibility of aerated water manufacturers to claim Modvat Credit on glass bottles received through endorsed gate passes without original packing. The appellants had availed Modvat Credit on empty glass bottles during a specific period after submitting the required declaration under relevant rules. The Department contended that the credit was wrongly claimed on gate passes issued in the name of printers and not in the appellants' name, and the consignments were not in original packing. The lower appellate authority upheld the disallowance of credit, citing non-fulfillment of Modvat Rules conditions regarding the diversion of inputs. The Collector (Appeals) reversed this decision in three appeals, leading to the Revenue filing further appeals.The Tribunal considered the statutory requirement under Rule 57G, emphasizing that inputs must be received with documents showing duty payment. In this case, glass bottles were delivered to a printer initially, who then supplied them to the appellants after printing, endorsed in the appellants' name on the original gate passes. Despite the consignee being the printer, the bottles were received in full as per invoices, meeting the duty-paid input requirement. Reference was made to a Central Excise Trade Notice and Circulars clarifying that as long as duty was paid on the glass bottles, credit should not be denied based on the absence of original packing after printing. The Circular also allowed extending the procedure to cover job work activities.Based on the discussions, the Tribunal concluded that the appellants were eligible for Modvat Credit on duty-paid glass bottles used in manufacturing aerated water. The judgment specifically mentioned M/s. Amritsar Bottling Co. and Amritsar Crown Caps Pvt. Ltd. as entitled to the credit, applicable to glass bottles held in stock on a specified date and received thereafter. Consequently, the impugned order was set aside for M/s. Amritsar Bottling Company, allowing their appeal with consequential relief. The appeals filed by the Revenue were rejected in light of this decision.