TaxTMI 
TaxTMI 
1999 (11) TMI 260
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed against the Order-in-Original by which the Asst. Commissioner had allowed the said credit. 2. The Asst. Commissioner had held that the machine was used for packing/strapping of the final product which is essential to render the finished goods viz., Shoes, marketable. The Asst. Commissioner observed that it was the settled position in law that any process incidental or ancillary for the manufacture of finished goods which renders the goods marketable, is a process of manufacture and packing is an essential process which renders the final product marketable. The Asst. Commissioner had also referred to the amendment made on 16-3-1995 to Explanation of Capital Goods specifying within the category of capital goods, Carton Sealing Mach....
X X X X Extracts X X X X
X X X X Extracts X X X X
....es (P) Ltd. v. C.C.E, Vadodara [1994 (70) E.L.T. 754 (Tribunal)] in which the Tribunal had taken the view that the definition of manufacture given in Section 2(f) of the Central Excise Act, 1944 "including any process incidental or ancillary to the completion of a manufactured product" would also extend to the process of packing the articles manufactured. In the said case the expression 'packaging material' used in Rule 57A was held to include for purpose of Rule 57A, raw material from which a package for packing of manufactured final product is to be made. He also drew attention to Para 10 in the Larger Bench decision of this Tribunal in Jawahar Mills Ltd. v. CCE, [1999 (108) E.L.T. 47 (Tribunal) = 1999 (32) RLT 379 (CEGAT - Larger Bench)]....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... will not be admissible for Modvat credit. For instance, R & D equipment used by a manufacturer in their laboratory located outside the factory will not be eligible for Modvat. If however, such laboratory is part of the manufacturer's factory, Modvat will be admissible. 6. Ld. Consultant contends that in the case of appellants, there was no dispute that the Carton Sealing Machinery was being used for the packing of their final products. Since the final products are required to be packed before they are removed from the factory, such packing was part of the manufacturing process and therefore the Carton Sealing Machines installed by the appellants in their factory was fully covered by the definition of capital goods under Rule 57Q. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing of any goods or for bringing about any change in the substance for the manufacture of the final products. The final products in the case of appellants are, Shoes. The machinery for which Modvat credit under Rule 57Q is claimed is Carton Sealing Machine, a machine which seals cartons used for packing the shoes. It is not in dispute that the said Carton Sealing Machines are not used for the production or processing of shoes as such, but only for sealing cartons in which the shoes are kept for transportation. In other words, the impugned machine is used for packing of the final products and not for the manufacture of the final products. I find that the reliance placed by the ld. Consultant on the Tribunal's decision in Ashwin Vanaspati I....