1. The respondents in this case are manufacturing Patent or Proprietary Medicines. They packed the tablets in strips of 10 tablets each and these strips are then packed in a small carton, which are packed in coorurugated boxes for selling in the wholesale market. They changed this packing for a short period between October 1989 till 1990 when they used Aristocrat brand 20 inch suit cases instead of corrugated boxes as a sales promotion measure. The Jurisdictional Assistant Commissioner of Central Excise held that the Aristocrat suit-cases are not packing material but travel goods. He therefore confirmed the recovery of Modvat credit amounting to Rs. 90,536/- by an order dated 30-4-1991. The Commissioner (Appeals) however allowed the appeal against the Assistant Commissioner's order with which the Commissioner of Central Excise, Ahmedabad is aggrieved.
2. Shri K.L. Ramteke the ld. JDR referred to the grounds of appeal and contended that the Aristrocrat suit-cases are not in the nature of packing material but are travel goods. But also due to its capability of repeated use, similar to plywood which is clearly recognisable as packing material has been excluded from Modvat eligiblity under the rules.
3. Shri Uday Joshi the ld. Counsel for the Respondent contended that the criterion for eligibility as packing material is that the cost of the packing material should be included in the assessable value of the final product as per Rule 57A(1)(iii) of the Explanation to that rule.
The Commissioner (Appeals) has given a clear finding that this criterion has been fulfilled in the present case.
4. We have carefully considered the submissions, and we are inclined to agree with the ld. Counsel for the respondents. According to Clause (b)(iii) of the Explanation to Rule 57A inputs do not included packaging materials, the cost of which is not included in the assessable value of the final products under Section 4 of the Central Excise Act. The rule itself does not define the term packaging materials. It is undisputed in this case that during the material period the respondents have received duty paid Aristrocrat suit cases and also they have used them in packing the tablets as secondary packing and the cost of such suit cases was included in the assessable value of the P or P medicines, as has been shown with reference to the value declared when the Aristrocrat suit cases were being used as compared to the period, when they were not used in packing medicines, in the impugned order by the Commissioner (Appeals). In the absence of any definition of the term packing material under Rule, what has to be looked for is only whether criterion in the Clause (iii) above is satisfied. Since it has been so fulfilled in the present case, we see no reason to interfere with the impugned order. The appeal is rejected.