NAGA LIMITED Vs. CCE

JUDGEMENT

(1.) THE appellants are manufacturers of detergent powder falling under S.H. 3402.90, which is marketed under the brand name "Ariel". They used to clear the product in a composite pack of 1 kg. detergent powder and a detergent cake (SH 3401.20) weighing 125 grms. Such clearance, during the material period, was made on payment of duty on an assessable value which included the cost of the cake also. Before such clearance, the appellants had filed Rule 57G declaration for availing input duty credit on the detergent cake. The department objected to the idea of availing input duty credit on the cake, saying that the cake was simply kept in the polythene pack containing finished detergent powder and was not to be considered as having been used in the manufacture of detergent powder. The show -cause notice issued for disallowing the credit was contested by the assessee. The original authority sustained the assessee's view. The department preferred appeal to the Commissioner (Appeals) and the latter sustained the department's view. Hence the present appeal of the assessee.

(2.) I have heard both sides. Ld. Counsel submits that the issue arising from the above facts is not res integra as it stands settled on a similar set of facts, in their favour by the Tribunal's decision in Standard Surfactants Ltd. v. CCE, Kanpur [ : 2000 (115) ELT 763 (T), wherein 'Ariel" brand detergent cake which was cleared along with soap powder in a composite pack was recognized as input for Modvat purpose and the department's plea that the activity of putting the cake with soap powder in composite pack did not amount to manufacture was rejected. Ld. Counsel has also submitted that the decision of the Tribunal in Jagsonpal Pharmaceuticals Ltd. v. CCE, New Delhi [ : 1997 (92) ELT 414 (T)], relied on in the impugned order, is not good law after the Tribunal's Larger Bench decision reported in : 2004 (170) ELT 142 (T -LB). Ld. SDR has reiterated the findings of the Commissioner (Appeals). No case law has been placed before me to support those findings.

(3.) FOR the aforesaid reasons, the impugned order cannot be sustained and the order of the original authority requires to be restored. Accordingly, the impugned order is set aside and the appeal is allowed.