At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai
By, HONBLE MR.P.KARTHIKEYAN
By, MEMBER (TECHNICAL)
For the Appearing Parties: V.V. Hariharan, JCDR, S.Venkatachalam, Advocates.
This is an appeal filed by the Revenue. The original authority dropped the proposals to disallow and recover credit of duty paid on plastic crates availed during January to October 05. Vide the impugned order, the Commissioner sustained the order of the original authority observing that the crates participated in the process of production of automobile components by the respondents by making processed materials available at various points within the factory. Therefore, these items were eligible for credit. In this appeal filed by Revenue, denial of the impugned credit is canvassed relying on the following decisions of the Tribunal :-
1) Commissioner Vs PKPN Spinning Mills (P) Ltd. 2005 (192) ELT 541 (Tri.)
2) Commissioner Vs Suganeswara Spinning Mills (P) Ltd. 2006 (199) ELT 698 (Tri.)
2. have heard the ld. JCDR for the Revenue and ld. counsel for the respondents. Ld. counsel relied on a decision of a Larger Bench of this Tribunal in the case of Banco Products (India) Ltd. Vs CCE Vadodara reported in 2009 (235) ELT 636 (Tri.-LB) holding that plastic crates were eligible for CENVAT credit.
3. I have carefully considered the submissions and perused the case records. In the instant case, the Revenue seeks to vacate the orders of the lower authorities holding that plastic crates were eligible for CENVAT credit as inputs. Vide the impugned order, the Commissioner relied on an earlier order of his in the case of Leo Fasteners [Order-in-Appeal No. 106/2006 (P) dated. 19.12.06] wherein he had allowed CENVAT credit on plastic trays as capital goods and sustained the order of the original authority in the instant case. I find that in the decision of the Larger Bench of the Tribunal cited supra, the Tribunal had held as follows :-
We fully agree with the above judgment on the issue. The plastic crates are used for transporting/storing of the goods in the factory of production. Proper storage of inputs is essential for efficient manufacturing process and in absence of proper facilities for storage and transportation; the same will affect the manufacturing process. Further, the Hon?ble Supreme Court in the case of M/s.Rajasthan State Chemical Works has observed that the manufacturing process starts with the drawing of water from the reservoir. By applying the same fact, it can be safely concluded that the manufacturing process starts with the issuance of the inputs from the stores and their further transportation to the production platform is only a part of the process of manufacture integrally related to the final production. In absence of the delivery of the raw material to the manufacturing platform, the process cannot start. Such delivery of the goods includes transportation of the goods by plastic crates. Similarly, finished products are required to be store
Please Login To View The Full Judgment!
d in a bonded store room. The plastic crates are again used for such transportation. As such, we are of the view that the plastic crates would also be eligible for modvat credit as input. 4. Following the above binding precedent, I sustain the impugned order and reject the appeal filed by the Revenue.