TaxTMI 
TaxTMI 
2000 (1) TMI 209
X X X X Extracts X X X X
X X X X Extracts X X X X
....ty to aerated waters w.e.f. 25-7-1991. The appellants filed a declaration on 1-8-1991 under Rule 57G to avail of credit of duty paid on inputs under Rule 57A of the Central Excise Rules, 1944. They also filed a declaration of stocks of inputs lying with them on 25-7-1991 or used in the manufacture of aerated waters cleared from their factory on or after 25-7-1991 and to avail the benefit of credit of duty paid on such inputs in terms of Rule 57H of the Central Excise Rules. The claim of Modvat credit under Rule 57H amounted to Rs. 16,37,762.22 of basic Central Excise Duty and of Rs. 81,304.52 of Special Excise Duty. They claimed Modvat credit on Sugar Carbon-di-oxide, Concentrate Pepsi, Concentrate 7 UP, Concentrate Mirinda, Crown Corks Pepsi, Crown Corks 7 UP, Crown Corks Mirinda, Crown Corks Evervees in addition to glass bottles. The Asstt. Collector allowed them the benefit on these items but rejected the same on glass bottles. The appellants filed an appeal before the ld. Collector (Appeals) who in the impugned order further allowed Modvat credit only on new glass bottles clearly proven to be received under gate passes which were duly endorsed by the printers/decorators in term....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he term stock has been defined in Black's Law Dictionary, Fifth Edition as the goods and wares of a merchant or tradesman, kept for sale and traffic. In a larger sense, the capital of a merchant or other person, including his merchandise, money, and credits, or, in other words, the entire property employed in business. He submitted that the expression lying in stock has been interpreted by the Tribunal in the case of Konark Cement & Asbestos Ltd. v. C.C.E., Bhubaneshwar reported in 1994 (69) E.L.T. 669. He submitted that the Tribunal in para 7 of its decision held : "7. We accept the contention of the ld. Senior Departmental Representative that sub-rule (1) of Rule 57 as it existed after 5-5-1989 sans the protecting sub-clause (ii) there under cannot be given effect to, as if the latter provision existed thereafter also. While deleting the said provision apparently on the ground that it was no longer necessary to lay down the condition of clearance on or after 1-3-1987, the vital coverage of inputs not in stock as such but used in the manufacture of final products cleared after a crucial date had also been deleted. The effect is that after the said amendment deleting sub-clause ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....onth of May, 1991, after repeated use and which are lying in the factory on 25-7-1991 get the Modvat credit and fresh bottles that are received in the factory on 20-7-1991 and are lying with the dealers on 25-7-1991 are denied the Modvat credit. Ld. Counsel submitted that in any case, the appellants are entitled to Modvat credit in terms of Clause (b) which stipulates that the inputs have to be used in the manufacture of final products cleared on or after 25-7-1991. Admittedly in this case the glass bottles lying outside the factory premises and used bottles inside the factory have been used in the manufacture of final products cleared on or after 25-7-1991; that Clause (b) is independent of Clause (a) as held in the case of C.C.E. v. Hindustan Development Corpn. reported in 1990 (47) E.L.T. 376. Ld. Counsel referred to para 10 of this judgment in which the Tribunal held that - "in the present case, the inputs had not only been received before 1-3-1986 but also utilised before 1-3-1986. Hence they were not in stock on 1-3-1986. Thus, condition 57H(1)(a) is not satisfied but we find that this is only one condition and there is an alternative condition covered by 57H(1)(b) which l....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or filled with aerated water in the factory and lying with the dealers of the factory. He submits that for being eligible for Modvat credit, the inputs should have nexus. He submits that caustic soda is used for washing bottles and/carbon is used for removing certain impurities from sugar syrup, filter aid and filter paper are used for filtering the items and other things and thus, they are neither used in main stream of production of aerated waters nor are they having any nexus with the process of manufacture of aerated water. He, therefore, submits that on these items Modvat credit has rightly been denied. He submits that in so far as old and new bottles are concerned, these bottles are not new. He submitted that once we talk of inputs we do not talk of old and used goods we talk only of new inputs and therefore, he submits that the authorities below have rightly denied Modvat credit on old and used bottles either in stock or lying with the dealers. He, therefore, prayed that the impugned order may be upheld and the appeal may be rejected. 7. We have heard the rival submissions. We have also perused the case law cited and relied upon by the appellant. We note that in so fa....