2017 (4) TMI 1215 - AT - Central Excise

Deduction on account of interest on receivables - Held that - cheque discounting charges charged by the Revenue are not includible in the assessable value, is not sustainable. CENVAT credit - photo frames given as a gift in Diwali institutional packs - denial on the ground that the same is not used in or in relation to the manufacture of final product - Held that - the issue has been settled in the case of CCE vs. Prime Health Care Products 2010 (10) TMI 881 - GUJARAT HIGH COURT , where it was held that the process of packing and re-packing the input, that is, toothbrush and tooth paste in a unit container would fall within the ambit of manufacture as defined under the Act and as such, the assessee would be entitled to claim cenvat credit on such input. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Denial of cenvat credit for photo frames given as gifts in Diwali institutional packs.
2. Claim for deduction on interest on receivables to determine the assessable value.

Analysis:
1. The appellant, engaged in manufacturing cocoa and chocolates, provided photo frames as gifts with Diwali packs and claimed cenvat credit. The revenue denied credit, arguing the frames were not used in the final product's manufacture. The Tribunal, citing precedents like CCE vs. Prime Health Care Products, held that the frames qualified as inputs under Cenvat Credit Rules. The Tribunal's decision was supported by various judgments, emphasizing that accessories included in final product packaging are eligible for credit. Thus, the appeal was allowed, as the issue was no longer res integra.

2. The appellant claimed a deduction for interest on receivables to calculate the assessable value. The Tribunal referred to its earlier order in the appellant's case, where it allowed the deduction on similar grounds. Citing legal precedents like Cadbury India Ltd. Vs. CCE, Aurangabad, the Tribunal highlighted that interest on receivables, like cheque discounting charges, should not be included in the assessable value. Relying on these judgments, the Tribunal set aside the impugned order disallowing the deduction, ruling in favor of the appellant.

In conclusion, the Tribunal upheld the appellant's claims regarding both issues, emphasizing the settled legal positions established in previous judgments. The decision was based on the interpretation of relevant laws and precedents, ensuring consistency and fairness in the application of tax laws.