AI Drafter 
TaxTMI 
TaxTMI 
1984 (8) TMI 328
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....e eligible for partial exemption from the excise duty leviable thereon to the extent of the duty paid on the printed cartons used in their packing. This claim was made in terms of Central Excise Notification No. 201/79, dated 4-6-1979. The appellants also put forth an alternative contention that, in the event of the aforesaid contention not being accepted, it should be held that the cost of the printed cartons and packing of the finished products into the cartons were in the nature of post-manufacturing expenses and, therefore, were deductible from the assessable value of the finished product. Both these contentions were rejected by the Assistant Collector as well as the Appellate Collector. In short, it was held by the Appellate Collector that packing of manufactured goods for their safety and protection or transportation was not a process incidental or ancillary to the completion of the manufactured goods. Neither in Section 2(f) of the Central excises and Salt Act, nor in the relevant tariff entries, packaging was included as a process of manufacture in the case of these goods. It could not be said that the printed cartons were used in the manufacture of the finished products. A....
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.... Ballarpur Industries Ltd. - 1983 E.L.T. 1263 in which the Bombay Bench of this Tribunal held that sodium sulphate used in the manufacture of sulphate pulp from which paper was produced, could be said to fall within the scope of Notification No. 201/79, dated 4-6-1979. Shri Gupta also referred to the meaning of the word "inputs" in standard Dictionaries and said that even containers were deemed as "inputs". While the appellants would not plead that printed cartons constituted raw materials for the purpose of the notification as amended on 28-2-1982 by Notification 105/82, they would say that in accordance with the dictionary meaning it could be said that printed cartons, constituting essential packing, were "components". Concluding, Shri Gupta urged that if two views were possible on the interpretation of the Notification 201/79, the one favourable to the assessee must be adopted. 5. Opposing the appeal, Smt. Vijay Zutshi submitted that the term "inputs" implied that they should go into the manufacture of the goods as ingredients or components. Dictionary meanings were not relevant or useful, nor was the concept of valuation in Section 4 decisive of the correct interpretati....
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....o nil rate of duty." A careful reading of the notification would show that the term "inputs' has not been used in it in the ordinary sense of the term but as a term of reference to goods falling under Item No. 68 of the CET used in the manufacture of other excisable goods. The term "inputs" itself is one of wide scope and not, as the Department contends, of restricted or narrow scope. What the notification requires is that the Item 68 goods which are referred to as "inputs' are used in the manufacture of other excisable goods. The Department wants to interpret the notification to mean that the Item 68 goods should enter into the composition and form part or ingredients of the finished product. In other words, they should be used as raw materials or components. But then this requirement that Item 68 goods should be used as raw materials or component parts was written into the notification only on 28-2-1982 by the amending notification No. 105/82. The amending notification, in our view, narrows down the scope of the 1979 notification and, incidentally, also the scope of the expression "inputs" as contemplated in it. In other words, with this amendment, the finished excisable goods....
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....ated as a process incidental or ancillary to the completion of that product and that it would not be correct to say that such packing materials were not used in an incidental or ancillary process to complete the manufactured product by turning it into marketable goods just because the materials used for the normal minimum packing were not "used up". This particular view was expounded at length in the Special Bench 'D' decision referred to above and following that decision we held that the benefit of the proforma credit under Central Excise Rule 56-A of the duty paid on the packing or wrapping paper used for packing or wrapping of other varieties of paper was admissible for being set off against the duty payable on the packed or wrapped paper. We agree with Shri M.S. Gupta that the amending notification was only prospective in nature. We do not agree with Smt. Vijay Zutshi that it was in the nature of a clarificatory notification which merely clarified the position already obtaining. It is true that synthetic detergent is available in the market in paper packs also. That, however, would not detract from the considerations which have led us to the above conclusion in respect of print....