Input credit for packing material upheld where department failed to prove exclusion from assessable value.

Plastic strapping used to pack cartons of processed and preserved food was treated as an eligible input for credit under Rule 57A because the department failed to prove that its cost was excluded from the assessable value of the final product. The assessee maintained that the strapping cost formed part of the assessable value, and the department did not rebut that position with price lists or other material evidence. As the objection was unsupported and the burden of showing non-inclusion was not discharged, the credit was held admissible and the departmental appeal was rejected.

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Issues: Whether plastic strapping used in packing cartons of processed and preserved food qualified as an input for credit under Rule 57A, where the department failed to establish that its cost was not included in the assessable value of the final product.

Analysis: The assessee's case before the Collector (Appeals) was that the cost of the strapping formed part of the assessable value of the final product. The department did not rebut this position with material such as the price list or other evidence to show that the cost had been excluded. Since the objection rested on an unsubstantiated assertion and the department bore the burden of establishing non-inclusion, no ground was shown to disturb the finding in favour of the assessee.

Conclusion: The credit was held admissible and the department's appeal was rejected.

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