Modvat credit on packaging-related inputs allowed where materials are essential to marketing the final product.

Modvat credit was treated as admissible on electrolytic tin sheets used as inputs in manufacturing vegetable products because earlier binding decisions had already recognised that materials used to make containers or other items essential to marketing of the final product can qualify as eligible inputs. The Tribunal applied that reasoning to the facts before it and found no distinguishing feature in the departmental challenge. Credit was therefore allowed on the disputed inputs, and the Revenue's appeal failed.

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Issues: Whether Modvat credit was admissible on electrolytic tin sheets used as inputs in the manufacture of vegetable product.

Analysis: The issue was treated as covered by earlier binding decisions holding that materials used to make containers or other items essential to the marketing of the final product can qualify as inputs for credit purposes. The Tribunal noted that the departmental appeal did not distinguish those authorities and that the same reasoning applied to the present facts.

Conclusion: Modvat credit was admissible on the disputed inputs, and the Revenue's appeal failed.

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