BHILWARA SPINNERS LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) HEARD . The issue involved in the case lies within a narrow compass. On the face of it, the appellant have a strong case. In view of the stay application is allowed unconditionally.

(2.) IN my view the appeal itself can be disposed of as the facts are not much in dispute. The Department has sought to deny the modvat credit to the appellant on the kraft paper which was sent by them to the job worker for conversion into corrugated boxes, the value of which was added by them in the assessable value of the final products viz. man -made fibre. The leaned Counsel has contended that the value of corrugated boxes got prepared from the job worker from the kraft paper, was added in the assessable value of the final products and as such, the appellants could not be denied modvat credit on the kraft paper. On the there hand, the learned JDR has reiterated the correctness of the impugned order.

(3.) I have heard both the sides and gone through the records. In my view, the contention raised by the learned Counsel deserves to be accepted. The duty paid nature of the kraft paper sent by the appellants t the job worker for getting the intermediate product i.e. corrugated boxes manufactured, has not been disputed by the Department. The fact was job worker did not avail the benefit of Notification 214/86 dated 25.3.86 as the products was chargeable to nil rate of duty, is of no relevance. The appellants has added the value of the corrugated boxes which they got manufactured from the kraft paper, in the assessable value of the final produce cleared on payment of appropriate duty. In CCE, Bangalore Vs. Viajaya Seamless containers P. Ltd. 2001 (46) RLT 316, it has been observed by the Tribunal that the kraft paper converted into cartons used fro packing of the final product is on eligible input for the purpose of modvat credit. Therefore, under these circumstances, the appellants could not be denied the modvat credit on the kraft paper.