2018 (7) TMI 594 - AT - Central Excise

CENVAT Credit - Input - detergent cakes - Held that - An identical issue came before the Tribunal in the case of CCE, Chennai Vs. Dynavista Industries (P) Ltd. 2015 (10) TMI 279 - CESTAT CHENNAI , wherein a detergent cake was being supplied in the pack of detergent powder cleared under the same brand name Kite and it was held that the assesse is entitled to the CENVAT credit of duty paid on the detergent cake soap, which is packed in the pouch of the detergent powder, which is being cleared on payment of duty on MRP basis. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Admissibility of Cenvat credit on duty paid for detergent cakes supplied with detergent powder.

Analysis:
The appellant, engaged in manufacturing detergent powder, received detergent powder in bulk and packed it along with free detergent cakes inside the pack of 900 gms of detergent powder under the brand name "Kite." The Revenue contended that the Cenvat credit of duty paid on the detergent cakes was inadmissible as it was not considered an input for manufacturing detergent powder. Consequently, demands were raised for the period from October 2009 to August 2010. The original authority and the Commissioner (Appeals) upheld the denial of Cenvat credit, leading to the appeals.

In a similar case, the Tribunal had ruled that an assessee was entitled to Cenvat credit on duty paid for detergent cakes packed with detergent powder cleared on an MRP basis. The Tribunal referred to a previous decision and a High Court judgment that supported the admissibility of such credit. The Tribunal found no dispute regarding the duty paid on the detergent powder and the correct declaration of the net weight of the combi-pack. The Tribunal emphasized the definition of "input" under the Cenvat Credit Rules and the provisions of the Central Excise Act, stating that the credit was justified for the assessee.

Given the identical issue in the present case, the Tribunal followed its previous decision and allowed the appeals, setting aside the impugned orders and granting consequential relief to the appellants. The Tribunal's decision was based on the interpretation of relevant legal provisions and precedents, affirming the admissibility of Cenvat credit on duty paid for detergent cakes supplied with detergent powder cleared on an MRP basis.

This detailed analysis highlights the key legal arguments, interpretations of statutes, and precedents considered by the Tribunal in reaching its decision regarding the admissibility of Cenvat credit on duty paid for detergent cakes supplied with detergent powder.