9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (2) TMI 9 - AT - Central ExciseCENVAT Credit - exempt goods or not - waste and scrap of batteries - demand of an amount equal to 5% of the value of the defective cells - Rule 6(3)(i) of the CENVAT Credit Rules 2004 - scope of SCN - Held that - The SCN as seen from page 55 of the Appeal Book, had proposed only to demand ₹ 14,874/- payable in terms of Rule 6(3)(i) ibid being an amount equal to 5% of the value of the exempted goods along with interest. There was absolutely no proposal to demand the Credit attributable to the inputs involved in the waste of dry cell batteries. This only would be the case when the Show Cause Notice has considered the waste and scrap of batteries as excisable goods - Once that proposition has been shot down by the Commissioner (Appeals) in paragraph 16(i) of the impugned Order, the further Order at paragraph 16(ii) directing the appellant to pay up the CENVAT Credit attributable to inputs involved in such non- excisable goods is definitely beyond the scope of the Show Cause Notice. On this very point, the impugned Order cannot sustain. The very issue of requirement of reversal of Credit in such cases has been addressed by the Tribunal in respect of the very same appellant in the case of Eveready Industries India Ltd. 2018 (6) TMI 625 - CESTAT ALLAHABAD , where it was held that C.B.E. & C. Instruction stand that Cenvat credit is admissible in respect of input contained in any of the waste, refuse or by product. Appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Rule 6(3)(i) of the CENVAT Credit Rules (CCR), 2004 regarding waste and scrap of batteries being exempted goods and liable for payment. Reversal of CENVAT Credit attributable to inputs in non-excisable goods. Analysis: The case involved the appellants engaged in manufacturing Dry Cell Batteries, leading to the generation of waste and scrap. The Department contended that the waste and scrap should be treated as exempted goods under Chapter Heading 8548.10.90, necessitating payment equal to 5% of the defective cells as per Rule 6(3)(i) of the CCR, 2004. A Show Cause Notice was issued, resulting in an Order confirming a demand with interest and penalty. The Commissioner (Appeals) ruled that waste and scrap are non-excisable, hence not covered under Rule 6(3)(i), dropping the demand. However, the CENVAT Credit related to inputs in such goods had to be reversed, while the penalty was set aside. During the hearing, the appellant appealed against reversing the CENVAT Credit for waste and scrap of batteries. The respondent supported the impugned Order. The Tribunal analyzed the Show Cause Notice, emphasizing that it did not propose reversing the Credit for inputs in waste, indicating a lack of consideration of waste as excisable goods. Referring to previous decisions, the Tribunal highlighted the admissibility of CENVAT Credit for inputs in waste and by-products, citing relevant C.B.E. & C. instructions. Consequently, the Commissioner (Appeals) decision was deemed unsustainable on merits, leading to the appeal's success and setting aside of the impugned Order. In conclusion, the Tribunal allowed the appeal with consequential benefits as per the law, overturning the decision that mandated the reversal of CENVAT Credit for inputs in waste and scrap of batteries. The ruling reaffirmed the admissibility of such Credit based on the inputs' usage in or in relation to the manufacture of final products, aligning with established legal principles and precedents.
|
