2001 (6) TMI 121

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....als may briefly be stated as under : 3.The appellants were engaged in the manufacture of footwear. They availed Modvat Credit on the carry bags during the period April 1996 to November 1996 of the amounts; i.e. Rs. 2,78,252/- (appellant no. 1), appellant no. (2), Rs. 4,45,750/- and Rs. 4,94,488/- (appellant no. 3), but the Modvat Credit was not admissible to them on that item under Rule 57A of the Central Excise Rules being not inputs as per the Explanation (b) to Rule 57A of the Rules. They were accordingly served with show cause notices for the recovery of the amounts and penalty was also proposed to be imposed on them for availing the Modvat credit illegally. Those notices were contested by them. In their reply they averred that the M....

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....6.The question which falls for consideration is as to whether the carry bags in these circumstances, can be held to be packing material under Rule 57-A of the Rules or not. 7.Rule 57A of the Rules, no doubt, permits the assessees to claim the Modvat credit on packing material if the cost of said material was included in the assessable value of the final product, but the material has to be proved to be a packing material by the manufacturer for taking benefit of this rule. By merely including the cost of the material in the assessable value would itself not entitle the manufacturer to claim Modvat credit under this rule if that material otherwise could not be held to be packing material. In the instant case, footwears are packed by the ap....