Brindavan Agro Industries Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. by the present appeal, the appellants have agitated against the order of the commissioner (appeals). the commissioner (appeals) had upheld the order of the additional commissioner who in his order dated 24-4-1995 had at one stage held that "no doubt the point putforth by the party would lend one to think like-wise" and proceeded further to decide the issue on a ground stating that 'in conclusion, modvat credits of duty paid on plastic crates, the secondary packing of the product coca cola "aerated water", is not admissible and therefore demands raised in this regard is maintainable'.2. shri k.l. rekhi, learned consultant appearing for the appellants submits that a show cause notice was issued to the appellants alleging that the plastic crates are not the inputs in the manufacture of aerated water. he submits that the appellants are engaged in the manufacture of aerated water and used plastic crates for transporting aerated water bottles from the factory to the wholesale market. he submits that the additional commissioner as adjudicating authority agreed with the contention of the appellants that for making aerated water marketable, the plastic crates are essential; that inspite of this fact while adjudicating case, the adjudicating authority confirmed the demand by denying the duty paid on plastic crates. he submits that the adjudicating authority further travelled beyond the show cause notice by bringing in a new concept that plastic crates are secondary packing. he submits that this allegation was never in the show cause notice, therefore, the adjudicating authority travelled beyond the scope of show cause notice. the learned consultant submits that insofar as admissibility of modvat credit is concerned, the issue has been settled by the decision of this tribunal in the case of black diamond beverages ltd. -1997 (91) e.l.t. 422. he submits that insofar as the question of travelling beyond the scope of show cause notice is concerned, the issue is settled by the apex court in the case of reckitt and colman of india limited - 1996 (88) e.l.t. 641, in the case of prince khadi woollen handloom production co-operative industrial society - 1996 (88) e.l.t. 637 and in the case of gtc industries limited - 1997 (94) e.lt. 9. the learned consultant submits that the plastic crates being modvatable item was examined by the hon'ble bombay high court in the case of goa bottling company private limited -1997 (90) e.l.t. 48 (bom.). he submits that in this case the hon'ble bombay high court had held that modvat credit was admissible on plastic crates. he, therefore, submits that on merits the case is fully covered by the decisions cited and relied upon by the appellants. he, therefore, prays that the appeal may be allowed.3. reiterating the findings of the lower authorities, shri p.k. jain, learned sdr submits that the tribunal in the case of amritsar beverages private limited -1996 (85) e.l.t. 359 had decided that plastic crates used for transportation of aerated water bottles does not fall within the ambit of packing material, as such do not qualify for the benefit of modvat credit under rule 57a. he submits that though single member bench decision, however, only on point of admissibility of modvat credit on plastic crates came up for decision in this case and that the tribunal went in depth discussion and examination of the facts and held that no modvat credit was admissible on plastic crates. the learned sdr submits that on merits the appellants do not have a case. he, therefore, prays that the appeal may be rejected.4. heard the submissions of both sides. perused the case law as also the findings of the lower authorities. we note that the adjudicating authority had admitted the contention made before him and since the contention made by the appellants were accepted he should have not proceeded for confirmation the demand. we also note that he brought second allegation which is not the subject matter of show cause notice.the second allegation was that plastic crates are secondary packing.thus he held that since they were secondary packing, modvat credit was not admissible on plastic crates, meaning thereby he took altogether a new allegation to confirm the demand. thus we note that the adjudicating authority travelled beyond the scope of show cause notice which is not permitted as held by the apex court and the decisions cited and relied upon by the appellants.5. on the contention of the learned sdr that this tribunal in the case of amritsar beverages private limited had held that modvat credit was not admissible on plastic crates used for transporting of aerated water bottles. we note that this issue was considered by two member bench of this tribunal in the case of black diamond beverages limited. in this case the tribunal had held that plastic crates are used as container for carrying bottles for the manufacture and marketing of aerated bottles (final product), are covered by term 'packaging material' under rule 57a on which modvat credit is admissible to the appellants. we note that the decision cited and relied upon by the learned sdr is single member bench decision whereas the decision in the case of black diamond beverages limited cited and relied upon by the appellants is by two member bench, therefore, the decision in the case of black diamond beverages limited will prevail over the decision of amritsar beverages private limited. moreover, we find that the decision in the case of black diamond beverages limited is later decision than in the case of amritsar beverages private limited. having regard to the above facts and discussions, we hold that modvat credit will be admissible on plastic crates prior to 17-11-1995.6. in the result, the appeal is allowed. consequential relief, if any, shall be admissible in accordance with law.

Judgment:
1. By the present appeal, the appellants have agitated against the order of the Commissioner (Appeals). The Commissioner (Appeals) had upheld the order of the Additional Commissioner who in his order dated 24-4-1995 had at one stage held that "No doubt the point putforth by the party would lend one to think like-wise" and proceeded further to decide the issue on a ground stating that 'In conclusion, Modvat credits of duty paid on plastic crates, the secondary packing of the product Coca Cola "Aerated Water", is not admissible and therefore demands raised in this regard is maintainable'.

2. Shri K.L. Rekhi, learned Consultant appearing for the appellants submits that a show cause notice was issued to the appellants alleging that the plastic crates are not the inputs in the manufacture of aerated water. He submits that the appellants are engaged in the manufacture of aerated water and used plastic crates for transporting aerated water bottles from the factory to the wholesale market. He submits that the Additional Commissioner as adjudicating authority agreed with the contention of the appellants that for making aerated water marketable, the plastic crates are essential; that inspite of this fact while adjudicating case, the adjudicating authority confirmed the demand by denying the duty paid on plastic crates. He submits that the adjudicating authority further travelled beyond the show cause notice by bringing in a new concept that plastic crates are secondary packing. He submits that this allegation was never in the show cause notice, therefore, the adjudicating authority travelled beyond the scope of show cause notice. The learned Consultant submits that insofar as admissibility of Modvat credit is concerned, the issue has been settled by the decision of this Tribunal in the case of Black Diamond Beverages Ltd. -1997 (91) E.L.T. 422. He submits that insofar as the question of travelling beyond the scope of show cause notice is concerned, the issue is settled by the Apex Court in the case of Reckitt and Colman of India Limited - 1996 (88) E.L.T. 641, in the case of Prince Khadi Woollen Handloom Production Co-operative Industrial Society - 1996 (88) E.L.T. 637 and in the case of GTC Industries Limited - 1997 (94) E.LT. 9. The learned Consultant submits that the plastic crates being modvatable item was examined by the Hon'ble Bombay High Court in the case of Goa Bottling Company Private Limited -1997 (90) E.L.T. 48 (Bom.). He submits that in this case the Hon'ble Bombay High Court had held that Modvat credit was admissible on plastic crates. He, therefore, submits that on merits the case is fully covered by the decisions cited and relied upon by the appellants. He, therefore, prays that the appeal may be allowed.

3. Reiterating the findings of the lower authorities, Shri P.K. Jain, learned SDR submits that the Tribunal in the case of Amritsar Beverages Private Limited -1996 (85) E.L.T. 359 had decided that plastic crates used for transportation of aerated water bottles does not fall within the ambit of packing material, as such do not qualify for the benefit of Modvat credit under Rule 57A. He submits that though Single Member Bench decision, however, only on point of admissibility of Modvat credit on plastic crates came up for decision in this case and that the Tribunal went in depth discussion and examination of the facts and held that no Modvat credit was admissible on plastic crates. The learned SDR submits that on merits the appellants do not have a case. He, therefore, prays that the appeal may be rejected.

4. Heard the submissions of both sides. Perused the case law as also the findings of the lower authorities. We note that the adjudicating authority had admitted the contention made before him and since the contention made by the appellants were accepted he should have not proceeded for confirmation the demand. We also note that he brought second allegation which is not the subject matter of show cause notice.

The second allegation was that plastic crates are secondary packing.

Thus he held that since they were secondary packing, Modvat credit was not admissible on plastic crates, meaning thereby he took altogether a new allegation to confirm the demand. Thus we note that the adjudicating authority travelled beyond the scope of show cause notice which is not permitted as held by the Apex Court and the decisions cited and relied upon by the appellants.

5. On the contention of the learned SDR that this Tribunal in the case of Amritsar Beverages Private Limited had held that Modvat credit was not admissible on plastic crates used for transporting of aerated water bottles. We note that this issue was considered by two Member Bench of this Tribunal in the case of Black Diamond Beverages Limited. In this case the Tribunal had held that plastic crates are used as container for carrying bottles for the manufacture and marketing of aerated bottles (final product), are covered by term 'packaging material' under Rule 57A on which Modvat credit is admissible to the appellants. We note that the decision cited and relied upon by the learned SDR is Single Member Bench decision whereas the decision in the case of Black Diamond Beverages Limited cited and relied upon by the appellants is by two Member Bench, therefore, the decision in the case of Black Diamond Beverages Limited will prevail over the decision of Amritsar Beverages Private Limited. Moreover, we find that the decision in the case of Black Diamond Beverages Limited is later decision than in the case of Amritsar Beverages Private Limited. Having regard to the above facts and discussions, we hold that Modvat credit will be admissible on plastic crates prior to 17-11-1995.

6. In the result, the appeal is allowed. Consequential relief, if any, shall be admissible in accordance with law.