C.C.E., RAIPUR Vs. ADVANI OERLIKON LTD.

JUDGEMENT

(1.) THIS is a Revenue appeal. The respondents manufacture "welding electrodes" falling under Ch.83 of the Central Excise Tariff Act, 1985. They availed modvat credit totally amounting to Rs. 65,775/ - on the item "Hot melt unit" as capital goods falling under Rule 57 -Q of the Central Excise Rules, 1944. The Asst. Commissioner of Central Excise, Raipur vide his Order dt. 9.8.99 has observed that the final product manufactured by the party are 'welding electrodes'. These welding electrodes are packed in the printed cartons. The 'hot melt unit' is used for blowing and sealing the printed cartons at both the ends. Thus, it is observed that it is used for packing the cartons. As such, it is held that it is not used for producing or processing of any goods or for bringing about any change in substance in the manufacture of welding electrodes which are the final products. The Asst. Commissioner in his order denied them the modvat credit of the aforestated amount and further imposed a penalty of Rs. 18,000/ - on them.

(2.) THE party filed an appeal and the Commissioner (Appeals) vide his Order dt. 21.8.2000 allowed the appeal of the party by setting aside the order passed by lower authority.

(3.) THE Revenue have filed an appeal against the above order of Commissioner (Appeals). I have heard Shri A.K. Jain, JDR for the appellants and Shri s. Manoj, Asst. Manager for the respondents' Company. The ld. representative of the respondents has filed a copy of the Order No. C -I/3288 -89/WZP/2000 dt. 21.9.2000 of West Regional bench of CEGAT, Bombay in their own case, in which, it is observed that "apart from question of protection from moisture and other elements for which packing was done of the goods it is normal commercial practice to pack them for such purposes as identification of the manufacturer, type of goods etc. It would be irrational to accept only the view that the Commissioner, without any support whatsoever that they could be marketed without packing. Marketability is an essential criterion for determining the liability of goods to excise duty and the process of rendering goods to market is a manufacture. The denial of the credit for this reason therefore cannot be sustained".