Modvat credit on packing materials depends on proof that their cost formed part of assessable value.

Modvat credit on glass bottles and plastic crates used for packing aerated waters was treated as available only where the packing material cost formed part of the assessable value. The certificate relied upon was found insufficient to prove that inclusion, and it was given undue weight. The matter was therefore remanded for fresh determination after verification of the relevant evidence to be produced by the assessee.

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Issues: Whether Modvat credit on glass bottles and plastic crates used for packing aerated waters could be allowed on the basis that the cost of such packing material had been included in the assessable value of the goods.

Analysis: Credit was stated to be available only if the cost of the packing material formed part of the assessable value. The certificate relied upon for that purpose was found to have been given undue weight and to be insufficient for establishing the inclusion of packing material cost. The matter required detailed verification on evidence to be produced by the assessee after hearing.

Conclusion: The issue was not finally decided on merits and was remanded to the Commissioner (Appeals) for fresh determination after verification of the relevant evidence.

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