1996 (6) TMI 203

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....of plastic bags in which the final products manufactured by the appellants herein namely nylon filament yarn and polyester filament yarn are packed. The Deputy Commissioner of Central Excise, Pathankot passed three separate orders in which he disallowed the Modvat credit by holding that the nylon filament yarn and polyester filament yarn are subjected to duty at specific rates and therefore the cost of LDPE granules was not included in the assessable value of the final product and hence the material will not be an input for which the Modvat credit would be taken. He also held that the LDPE granules as such are not packing material and as such are not inputs in terms of Rule 57A and explanation thereto. The Commissioner (Appeals) overruled t....

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....being stored in the bonded store room in their factory. The conclusions of the Commissioner (Appeals) also do not find support in the decisions of the Tribunal on this question. The decision of the Tribunal in the case of Shree Cement v. CCE - 1994 (70) E.L.T. 799 was cited wherein it was held that HDPE bags used in packing cement was held to be an eligible input for Modvat. The Madras High Court in similar circumstances of packing of cement in bags held that Modvat credit was admissible as reported in the case of India Cement v. Assistant Commissioner - 1995 (75) E.L.T. 493. The learned C.A. further contended that in the Ponds India judgment of the Madras High Court it has been laid down that packing material is different from a package or....