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2005 (2) TMI 378 - AT - Central Excise
Issues:
- Availing input duty credit on detergent cake used in composite pack - Interpretation of Chapter Note 6 to Chapter 34 regarding "manufacture" Analysis: The case involved the appellants, manufacturers of detergent powder marketed under the brand name "Ariel", who cleared their product in a composite pack containing detergent powder and a detergent cake. The appellants filed a Rule 57G declaration to avail input duty credit on the detergent cake. The department objected, claiming the cake was not used in the manufacture of detergent powder. The original authority supported the assessee's view, but the Commissioner (Appeals) sided with the department, leading to the present appeal. During the hearing, the appellant's counsel cited a Tribunal decision in Standard Surfactants Ltd. v. CCE, Kanpur, where a similar situation was ruled in their favor. They argued that the Tribunal's decision in Jagsonpal Pharmaceuticals Ltd. v. CCE, New Delhi, relied upon by the Commissioner (Appeals), was no longer valid law post the Tribunal's Larger Bench decision. The Larger Bench had allowed credit on similar items by considering relevant chapter notes. The Tribunal noted that the decision in Jagsonpal Pharmaceuticals Ltd. failed to consider Chapter Note 5 to Chapter 30 of the Central Excise Tariff Schedule, which was crucial for determining what constituted "manufacture." Similarly, Note 6 to Chapter 34, relevant to the case at hand, stated that repacking products for marketability amounted to manufacture. Given that the detergent cake was included in the pack to attract consumers, the Tribunal found the reasoning of the Larger Bench applicable. Referring to the precedent set in Standard Surfactants Ltd., where input credit on detergent cake was allowed, the Tribunal concluded that the impugned order disallowing the credit could not stand, and the original authority's decision was reinstated. Therefore, the Tribunal set aside the impugned order and allowed the appeal in favor of the assessee.
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