TaxTMI 
TaxTMI 
2001 (5) TMI 467
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.... Assistant Commissioner who allowed Modvat credit on the pet jars/plastic containers to the appellants being essential packing material for packing of laminated pouches of pan masala. 2. The appellants were engaged in the manufacture of pan prag brand pan Masala and had been availing Modvat credit on inputs which included packing material adhesive tapes, polythene bags etc. They were producing pan masala in pouches of 1.75 gms., 4.00 gms, and tin containers of 100 gms., 250 gms and 1000 gms. Earlier to 28-2-1997 they had been paying Central Excise duty at the rate of 40% ad valorem on wholesale prices but after the issuance of Notification No. 5/97-C.E. (N.T.), dated 1-3-1997 under which tariff values were fixed they started paying ....
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....Appeals) who set aside the same and allowed the appeals, through the common impugned order. The appellants have come in appeal before the Tribunal. 4 Learned Counsel for the appellants has contended that since the jars/containers were being used as packing material for packing pouches of the product pan masala, they were entitled to take the Modvat credit thereon legally and that the Commissioner (Appeals) had wrongly disallowed the same. In support of this contention, Counsel has placed reliance on the ratio of the law laid down in (1) Government of India v. Madras Rubber Factory, 1995 (77) E.L.T. 433 (S.C.), (2) J.K. Synthetics Ltd. v. CCE, 1997 (92) E.L.T. 150 (Tribunal), (3) Cadbury India Ltd. v. CCE, Bangalore, 1998 (104) E.L.T....
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.... package containing pan masala, which was produced, distributed, displayed, delivered or stored for sale through the retail agencies or instrumentatlities for consumption by an individual or a group of individuals. The retail sale of the pan masala was being made by the appellants in small pouches weighing 2 gms or less, 2 to 4 gms. and 5 to 10 gms. or in the tin container of 100 gms. The pet jars/plastic containers were not used by them for the direct packing of the pan masala. They were using these jars and containers only for putting the retail packing i.e. laminated pouches of the pan masala. It is not the case of the appellants that the retail sale of the pan masala could not take place in laminated pouches or tin containers without pu....
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....nly the pouches are sold containing pan masala after taking out from those jars, to the consumers. 9. Similarly, in J.K. Synthetics Ltd. v. CCE (supra) it has been only observed that the packing material was not includible from the purview of input where the final product was liable to specific rate of duty and were not affected by any inclusion of cost of packing material but such is not the position in the case in hand. The tariff value for retail packages of the pan masala has been fixed by the Government under Notification No. 5/97-C.E. (N.T.), dated 1-3-1997 and what would be the retail package had been also defined in the Explanation appended to that notification. The packing of the appellants in jars and containers of the pan....
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....nd Beverages Ltd. (supra) is not of any help to the appellants as in that case the crates were held to be packing material being containers of the bottles of aerated water and Modvat credit was allowed thereon, but such is not the position in the instant case. 13. The second argument of the counsel that the Commissioner (Appeals) has travelled beyond the scope of the show cause notices as there was no reference to the Notification No. 5/97-C.E. (N.T.) in question in it, is wholly misconceived and not liable to be accepted. The bare perusal of the show cause notices shows that specific reference to the Notification No. 5/97-C.E. (N.T.), dated 1-3-1997 under which the tariff value of pan masala was fixed had been made by the Excise De....