2002 (11) TMI 233

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....er (T)]. - The issue that arises in this appeal is the eligibility for Modvat credit of duty paid on 'Chlorine containers'. The Revenue contend that these containers being of durable nature and for repeat use, their value is not includible in the assessable value of final product 'Chlorine' and for that reason Modvat credit is not available in respect of duty paid on these containers. The objectio....

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....ed that this was a case where price of durable containers was included in the price of goods sold, on the basis of amortization. The learned Counsel pointed out that in respect of high value containers amortization is the only acceptable commercial way for charging the price of container and revenue authorities are in error in refusing to accept this commercial principle and in holding that only c....

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.... involved revenue risk inasmuch as if a container was not used for the 300 trips for some reason or other, there would be revenue loss as the entire duty paid on the container is taken as Modvat credit at the time of receipt of the container in the appellant's factory, while no reversal of credit on proportionate basis takes place in the case of failure to use of a container 300 times. The learned....

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.... If the entire value of durable container is charged as a part of the price of the goods sold in each sale, the sale price would be exceedingly high and trade in the goods would become impossible. It is for that reason that the method of amortization is adopted with regard to the inclusion of the price of the container in the price of the contents. This does not mean that the price of the containe....