CCE Vs. PKPN SPINNING MILLS (P) LTD.

JUDGEMENT

(1.) This matter was heard in part yesterday. In order to enable the respondents' counsel to produce a copy of the assessee's Memorandum of Appeal filed with the lower appellate authority, a day's time was given. Accordingly, the matter has arisen today.

(2.) Examined the records including the above Memorandum of Appeal and heard both sides. Capital goods credit of Rs. 20,800/ - was allowed to the respondents by the lower appellate authority in respect of "plastic crates" SH 3923.90) for the period September 2001 and May 2002. Hence this appeal of the department.

(3.) In the impugned order, Ld. Commissioner (Appeals) has relied on the Supreme Court's judgments in J.K. Cotton Spinning and Weaving Mills Co. Ltd. v. STO Kanpur 1997 (91) ELT 34 (SC), wherein the expression "in the manufacture of goods" was interpreted by the court and it was held that it should normally encompass the entire process of converting of raw material into finished goods. Ld. Commissioner (Appeals), on this basis, treated the plastic crates' as inputs and allowed input duty credit to the assessee, notwithstanding the fact that assessee had not claimed such a relief. In the present appeal, the rationale of the above view taken by the ld. Commissioner (Appeals) has been questioned. It is pointed out that the Supreme Court's decision did not consider any machinery or any part or accessory thereof, as input. This ground has been reiterated today by ld. SDR. It is submitted by ld. Counsel for the respondents that the definition of "input" under Rule 2(f) of the Cenvat Credit Rules, 2001 and under the corresponding provision of the Cenvat Credit Rules, 2002 is wide enough to include any goods (except High speed oil and Motor spirit) used in or in relation to the manufacture of final product whether directly or indirectly and whether contained in the final product or not. It is his argument that "plastic crates" fitted well into this definition. It is, further, pointed out that this Bench allowed capital goods credit under Rule 57Q of the Central Excise Rules in respect of 'plastic crates' for the month of October 1999 in the case of CCE Salem v. Cheran Spinners .