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2015 (10) TMI 279 - AT - Central ExciseDenial of CENVAT Credit - Credit availed on detergent soap which was supplied free along with detergent powder - MRP based valuation - Held that - respondents had packed free supply of one detergent soap (valueRs.5 per piece) inside the washing powder of 500 gms. and correctly declared the net weight of the combi-pack of 575 gms. and discharged duty on the detergent powder. The respondents are rightly covered under Section 2(f) (3) of Central Excise Act. The lower authority has rightly relied on decision of this Bench of the Tribunal in the case of Lotte India Corporation Ltd. (2007 (12) TMI 66 - CESTAT, CHENNAI). - ratio of the Hon ble Gujarat High Court judgement (2010 (10) TMI 881 - GUJARAT HIGH COURT) is rightly applicable to the present case. Therefore, I do not find any infirmity in the orders of the Lower Appellate Authority since he has rightly relied on this Tribunal s decision 2009 (1) TMI 465 - CESTAT, AHMEDABAD which has been upheld by the Hon ble Gujarat High Court - Decided in favour of assessee.
Issues:
Appeal against Commissioner (Appeals) order regarding Cenvat credit on detergent soap supplied free with detergent powder. Analysis: The Revenue filed an appeal against the Commissioner (Appeals) order dated 13.4.2009. The case involved a manufacturer of Kite Detergent Powder repacking bulk detergent into retail packs along with a free offer of detergent soap. The issue was the denial of Cenvat credit on the detergent soap supplied free with the powder. The adjudicating authority confirmed the demand of Cenvat credit, interest, and penalty. The respondents appealed, and the Commissioner (Appeals) allowed the appeal, leading to the Revenue's present appeal. The Revenue contended that detergent cake is not an input for detergent powder manufacture, thus not eligible for Cenvat credit on the free detergent soap. They argued that detergent soap is a finished product, separately marketable, and cannot be considered an input. The respondent's advocate, on the other hand, cited the amendment of Section 2(f) of the Central Excise Act, where labeling and repacking constitute "manufacture," covering soaps under Chapter 34. The goods were correctly labeled under M.R.P. and discharged duty accordingly. The Member examined the facts and grounds of appeal. The Revenue's argument centered on the free supply of detergent soap packed inside the powder, questioning the eligibility of Cenvat credit. The lower authority extensively discussed the issue, relying on the Tribunal's decision in Lotte India Corporation Ltd. vs. CCE Pondicherry. The Member noted that the respondents correctly declared the net weight of the combi-pack, discharged duty on the powder, and fell under Section 2(f)(3) of the Central Excise Act. The Member also referenced the Gujarat High Court's decision supporting the Tribunal's view on Cenvat credit eligibility for items like toothbrushes packed with toothpaste. Despite the Revenue's reliance on other decisions, the Member found the Gujarat High Court's judgment applicable post-amendment of Section 2(f) to the present case. Consequently, the impugned order was upheld, and the Revenue's appeal was rejected. The Member concluded the operative part of the order on 17.3.2015.
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