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2014 (6) TMI 420 - AT - Central ExciseDuty demand - Non putting MRP on export of biscuits - CENVAT Credit - credit on the biscuits manufactured and exported - Held that - Law made in India applies to the whole of India or within the territory situated in India. They do not have extra territorial jurisdiction. This applies to Standards of Weights and Measures Act, 1976 and the Standards of Weights and Measures (Packaged Commodities) Rules, 1977. Therefore, the requirement of affixing MRP is only meant for goods required to be sold in India and it has nothing to do with the goods exported. Therefore, any exemption given on the basis of MRP applies to goods sold in India and has no application whatsoever in respect of identical goods exported. The case laws cited by the appellants also confirm these facts. As held by the Hon ble High Court of Bombay in Repro India Ltd. case (2007 (12) TMI 209 - BOMBAY HIGH COURT), even in respect of exempted goods, CENVAT credit can be availed on inputs/input services if such goods are exported. - Decided in favour of assessee.
Issues:
1. Duty demand confirmation along with interest and penalty on ineligible CENVAT credit availed by the appellant. 2. Interpretation of the requirement to affix Retail Sales Price (RSP) on goods manufactured for export and its impact on availing CENVAT credit. 3. Applicability of exemption based on RSP to goods sold domestically versus goods exported. 4. Admissibility of CENVAT credit on inputs/input services used in the manufacture of goods meant for export even if they are exempt when sold domestically. Analysis: Issue 1: The appeal challenges the Order-in-Original confirming a duty demand, interest, and penalty on the appellant for availing ineligible CENVAT credit on biscuits manufactured and exported. The appellant, a biscuit manufacturer, argues that they do not avail CENVAT credit on biscuits with a Retail Sales Price (RSP) of less than Rs.100 per Kg, as they are duty-exempt under a specific notification. However, they claim CENVAT credit on inputs for exported biscuits, as RSP labeling is not required for export goods. The department objected to this credit claiming the exemption only applies to domestic sales. The appellant cites Circulars and case laws supporting their position that RSP exemption does not extend to exported goods, and CENVAT credit is permissible for export-oriented inputs. Issue 2: The core issue revolves around the interpretation of the requirement to affix RSP on goods manufactured for export and its impact on availing CENVAT credit. The appellant argues that the Standards of Weights & Measures Act and Rules apply only to goods sold domestically, not to exports. They contend that the exemption based on RSP is limited to domestic sales and does not restrict availing CENVAT credit on inputs used for exported goods. The Tribunal concurs, emphasizing that the RSP requirement is domestic-centric and does not apply to goods meant for export, aligning with legal precedents and the territorial scope of Indian laws. Issue 3: The judgment clarifies that exemptions based on RSP are applicable to goods sold within India and do not extend to identical goods exported. The Tribunal underscores the distinction between goods sold domestically, subject to RSP regulations, and export goods exempt from such requirements. This differentiation highlights that the exemption criteria based on RSP are specific to the domestic market and do not impede the eligibility of exported goods for CENVAT credit on inputs. Issue 4: The ruling reaffirms the admissibility of CENVAT credit on inputs used in the manufacture of goods intended for export, even if those goods are exempt from duty when sold domestically. Citing legal precedents and the High Court's decision in Repro India Ltd. case, the Tribunal emphasizes that CENVAT credit can be availed for inputs related to exported goods, irrespective of their exemption status in the domestic market. This interpretation upholds the principle that export-oriented inputs are eligible for CENVAT credit under relevant rules, irrespective of the domestic duty exemption status.
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