2006 (1) TMI 487

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.... of Rs. 36,108/- on Plastic crates and P.P. Sheet trays considering these goods as 'inputs'. The original authority disallowed the credit, holding that the said items did not fit into the definition of "inputs". Ld. Commissioner (Appeals) took the view that the definition of "input" was wide enough to cover the above items and, accordingly, allowed the credit. Hence the Revenue's appeal. For the period June-September 2003, Cenvat credit of Rs. 6004/- taken by M/s. Pricol on plastic crates and P.P. Sheet trays was also allowed by the Commissioner (Appeals). This time, however, the appellate authority considered the above items as 'capital goods'. The party has filed appeal No. E/332/2005 for holding that the "crates" and "trays" are 'inputs'....

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....Credit Rules, 2002/2004, "capital goods" for the purpose of Cenvat credit were specified in an exhaustive list, which reads as under : "(i)    all goods falling under Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading No. 68.02 and sub-heading No. 6801.10 of the First Schedule to the Tariff Act; (i)      Components, spares and accessories of the goods specified at (i) above ; (ii)     moulds and dies; (iii)    refractories and refractory materials; (iv)    tubes and pipes and fitting thereof; (v)     pollution control equipment; and (vi)    storage tank. used in the factory of the manufact....

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....s nothing in this judgment which would support the view that capital goods used in relation to the manufacture of other goods can be treated as input or raw material. The term "input" has a conventional meaning. It should get wholly or substantially used-up by the time the output emerges. The plastic crates used by the respondents as material handling equipment can hardly be treated as inputs as the definition of "input" under Rule 2 of the Cenvat Credit Rules, 2001/2002 cannot be extended so as to encompass the goods which are conventionally regarded as capital goods. There is a clear dividing line between the two and this aspect was not subject matter of J.K.Cotton Spinning and Weaving Mills (supra)." 4. The decisions cited by ld.....

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....ep towards such production would be a process in relation to the manufacture. Where any particular process is so integrally connected with the ultimate production of goods that but for that process manufacture or processing of goods would be impossible or commercially inexpedient, that process is one in relation to the manufacture" Their lordships were considering the scope of the expression "in relation to the manufacture" in the above case. They were considering an essentially chemical process consisting of numerous steps/stages. It was held that, where any particular step was so integrally connected with the ultimate production of goods, such step could be regarded as "in relation to the manufacture". In the instant case, M/s. Pricol ....