- (1.) We have heard the learned Counsel for the parties extensively. We have also perused the order passed by the Tribunal. The only question that arose in this matter is whether the card can be called an advertisement or a packaging material. According to the Revenue, such hanging cards are not packaging materials but to be treated as advertising materials and as such are ineligible for taking MODVAT credit. It is contended on behalf of the respondents that the hanging cards are nothing but packaging materials and 100 blades are packed in such a hanging packing card which are folded and cleared together by further packing.
(2.) Mr. Mukherjee, learned Counsel appearing in support of this appeal, relied on a decision of the Tribunal rendered in the case of Ajanta Prints Arts V/s. Collector of Central Excise Bombay,1998 98 ELT 406 (Tribunal) and tried to urge before us that hanging cards are posters with advertising material printed thereon along with sample of advertised article and therefore it cannot be said to be packaging materials.
(3.) We have also considered the opinion expressed by the Tribunal. In our considered opinion the said Ajanta Print Arts's case cannot have any application in the facts and circumstances of the present case as it appears that in the said decision it was admitted that the said advertising material is not packing material. After considering the facts of the present case, it appears to us that the material used by the respondent cannot be said to be advertising materials. It appears that the learned Tribunal has dealt with the matter extensively and came to the conclusion as follows : "Such hanging cards duly carrying the blades fitted on them have been produced before me. No doubt, the same contained printed reproduction of coloured designs of some particular razor blades by utilising the space left over after the packing. It is also a matter of common knowledge that the same are hanged in the shop but the question is whether by such reproduction of quality of the product on the hanging cards and making it suitable for the purpose of hanging, will the same get converted from packing materials to advertising the materials. A container or a part of any cosmetic product meant for keeping on the shelves of the shop, reproducing the qualification of a product contained inside, will not get converted into the advertising material on that account itself. The only difference between a pack of a product and the hanging cards is hanged, both attract the attention of the customer. As such, in my view it cannot be said that hanging cards are advertising material and not packing materials. That being so, and on account of the fact that their cost is added in the assessable value of the final product or the blades, they become eligible for the purpose dt. Modvat credit in terms of the provisions of Rule 57B. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellants".;