CHERAN SPINNERS Vs. CCE

JUDGEMENT

(1.) This appeal filed by the Revenue is directed against the order in Appeal No. 229/2002 -A(ADK)(CBE) dated 13.11.2002 passed by the Commissioner of Central Excise (Appeals), Trichy by which he has allowed the appeal of the assessee holding that plastic crates used for carrying cops within the factory of the assessee are eligible for Modvat Credit.

(2.) The brief facts of the case are that the assessee -respondents are engaged in the manufacture of cotton flax yarn, viscose staple fibre yarn and polyester fibre yarn and poly viscose blended yarn falling under Chapter 52 and 55 of the CETA, 1985. They are also availing the facility of Modvat credit on capital goods as per Rule 57Q of the Rules. During the month of October 1999, they have availed credit of Rs. 9,840/ - on the item"plastic crates" falling under sub -heading 3923.90 in their RG 23C Part II. The department was of the view that since this item does not fall under the term "capital goods under Rule 57Q,they are not eligible for the benefit of Modvat Credit. Show cause notice was therefore issued to the assessee which culminated in the order of the original authority whereby he has disallowed the benefit. The assessee went on appeal before the lower appellate authority who by the impugned order allowed the benefit relying the judgment of the Hon'ble Supreme court in the case of CCE Vs. Jawahar Mills reported in (2002 -TAXINDIAONLINE -87 -SC -CX) and the Tribunal decision in the case of Parle Beverages Ltd. Vs. CCE reported in 2000 (124) ELT 803. Aggrieved by the said decision the Revenue has come in appeal.

(3.) Shri C Mani, learned JDR appearing for the Revenue referred to the grounds of appeal and submitted that the item, "Plastic Crates' falls under heading 3923.90 which does not fall under any of the headings listed under Rule 57Q at the relevant time. In the case of Parle Beverages Ltd. Vs. CCE reported in 2000 (124) ELT 803 the eligibility of plastic crates was decided in favour of the assessee as inputs since they are used as packing materials for the transportation of the finished goods whereas in the present case the item "Plastic crates" are not used as packing materials but as used for carrying semi finished cops from one department to other within the spinning mill and are not capital goods. The learned JDR therefore prayed for allowing the Revenue appeal.