CADBURY INDIA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) The Modvat credit has been denied to the appellants on the ground that plastic jars in which eclairs are being sold by the appellants and which are manufactured from the inputs on which Modvat credit was taken, the cost of such jars is not included in the assessable value of the eclairs and therefore, the Modvat credit on the input used in the manufacture of such jars is not allowable to the appellants.

(2.) Shri R.C. Gupta, learned Advocate, appearing for the appellants pleaded that eclairs are covered by the Standards of Weights and Measures (Package Commodity) Rules, 1997 and therefore, the goods were being sold mentioning the mark retail price of the goods includes packing material for sale. Therefore, it cannot be said that appellants were not including the value of the jars. He also relied on the explanation given by the appellants vide their Fax dated August 2, 1999 to the Superintendent (Preventive), Central Excise, Gwalior wherein it was clarified that though sale price of jar and bag is same in the wholesale market then assessable value of both will be the same. In case of jar, the profit margin to company is lower than that of the bag because the pricing of the product is determined not just on the cost but also on the market realities. He also referred to the Chartered Accountant's certificate dated Feb. 24, 2000 (page 46 of the paper book) where it was certified that the cost of plastic moulded jar used for packing the eclairs is included in the price of the finished produced Cadbury Dairy Milk Eclair, He, therefore, pleaded that the denial of Modvat credit on the inputs used for the manufacture of jar is contrary to law. He also relied on the following decisions: -

(3.) Shri V. Valte, learned SDR appearing for the Revenue pleaded that Chartered Accountant's certificate does not show the detail of the documents which were referred by him. He also referred to the statement of Shri Arvind Sharma wherein it is stated that they have absorbed the cost of jar in their margin. He, therefore, pleaded that jars were supplied free of cost to the customers and therefore, the credit of duty on the inputs used in the manufacture of jars should not be allowed.