Modvat credit on branded glass bottles remanded for fresh consideration after binding circular clarified entitlement.

Modvat credit on glass bottles used for aerated waters could not be denied merely because the bottles were not received in their original packing after branding, as a Board circular clarified entitlement on that point. The CEGAT found the earlier orders had been made before the circular and required reconsideration in light of that clarification. The matter was remanded for de novo adjudication, with an opportunity to produce gate passes and other supporting documents and after observing natural justice. The denial of credit was therefore not sustained at that stage, and admissibility was left to fresh decision on the record.

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Issues: Whether Modvat credit on glass bottles used for aerated waters could be denied because the bottles were not received in their original packing after printing of the brand name.

Analysis: The issue was held to be covered by the Board's circular clarifying that credit should not be denied on that ground. As the orders of the lower authorities had been passed before the circular, the matter required fresh examination. The case was sent back for de novo consideration in the light of the circular, with opportunity to produce gate passes and other documents and after observing natural justice.

Conclusion: The denial of credit was not sustained at this stage, and the matter was remanded for fresh decision in accordance with the Board's circular.

Final Conclusion: The appeal was allowed in remand, leaving the admissibility of Modvat credit to be re-decided by the Assistant Collector on a fresh record.

Ratio Decidendi: Where a binding departmental circular clarifies the entitlement to Modvat credit, prior orders inconsistent with that clarification may be set aside and the matter remanded for fresh adjudication after hearing the parties.

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