Asmaco Plastic Industries [1998 (100) E.L.T. 129 (Tribunal-Mumbai)]

In this matter, the inputs declared are BOPP film and prepared glue. The process of manufacture is that prepared blue is subjected to mixing in the machines to be mixed with other chemicals and pigments. Thereafter BOPP film is subjected coating with the above said mixture. The other processes which follow are slitting of the coated BOPP films and winding thereof. The accident due to fire in this case occurred at the coating stage. According to rule 57F (3) relating to utilisation of the credit, it is to be utilised towards payment of duty on any of the final products in or in relation to the manufacture of such inputs “intended to be used” in accordance with the declaration filed under rule 57G. Therefore, in the present case, the inputs BOPP films and prepared glue have admittedly been put to intended use, and have even passed one stage of mixture with the other chemicals in the case of prepared glue, and the destruction by fire occurred at the stage of coating.

After hearing the facts and circumstances of this case, be held that the inputs have been put to the intended use because coating stage is integral to the manufacture and emergence of the finished product, and as it is well settled, the expression “used in the manufacture of goods”. Thus, it was held that CENVAT credit is eligible if inputs are destroyed by fire during the process.