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TMI BlogCENVAT CREDIT ON ICE CREAM.X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sirs, Our management has ordered ice cream to all staffs and workers. As per order ice cream manufacturer has executed order and issued bill by charging excise duty 2% on ice cream under chapter 21050000. Can we avail cenvat credit on ice cream Bill. - Reply By Rajagopalan Ranganathan - The Reply = Sir, Please explain how ice cream is used in the manufacture or production of your final ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... product. If you can prove the nexus between ice cream and your final product then you can avail the credit. - Reply By sanjeev jadhav - The Reply = Dear Sir, Thanks you for reply. Their is no any nexus between ice cream and production. But same is given by management for motivation purpose. I got my point. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = You cannot take credit as it has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no nexus with the activities of manufacturing. - Reply By Himansu Sha - The Reply = Sir, Kindly note two points 1. As per Notf. no. 1/11 amended woth Notf 16/12 , the commodities are charged with 2% duty. Proviso to Rule 3(1)(i) credit on such goods cannot be taken 2. In one decision Hon'ble Trinual questioned the increase in production by supply of Breads to the works. Also P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease refer to the Decision of Hon'ble High Court in the Case of Manikgarh cement. Hence there is no iota of doubt about ineligibility of credit. With due regards - Reply By KASTURI SETHI - The Reply = Credit not allowed. I support the views of all experts - Reply By Himansu Sha - The Reply = Thank you Sir - Reply By KASTURI SETHI - The Reply = When law is very much clear, any cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e law even if in favour of manufacturer on the ground of promotional activity, shall not help the querist at all. Any judgement helps only if there is confusion in law. - Reply By sanjeev jadhav - The Reply = Dear All Experts, I thanks all of you for your valuable suggestion. We will not take cenvat credit on Ice Cream as per your suggestion. - Reply By KASTURI SETHI - The Reply = Dear Queri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, By agreeing to the views of experts you have saved yourself from the rigours of litigation. - Reply By Ganeshan Kalyani - The Reply = For e.g. a safety week campaign in going on in a factory. After successful completion of the campaign, every staff and worker of a factory is being offered ice-cream as a refreshment. Since, safety is utmost important in a factory. It has impac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on the manufacturing activity. By learning from the campaign the workers are able to work safely. The mishaps /accidents are less resulting in more production. Saving time. Now workers are able to work more as they are aware of safety norms. Thus, it can be said that there is link of the safety activity with the manufacturing activity. The expenses incurred to conduct safety week is a safety exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enditure. It should not be said as welfare to the employee, but an important condition in a factory. Thus the expense incurred in course of conducting safety week is having a link with the production. So, should the credit on purchase of ice-cream be allowed to avail cenvat credit? - Reply By Ganeshan Kalyani - The Reply = As per provision cenvat on ice-cream which is refreshment is not eligible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for cenvat credit. My previous reply is to invite discussion only. - Reply By Himansu Sha - The Reply = 1. the ice cream in question has suffered 2% duty which is not eligible for credit. 2. The credit on icecream if allowed, will be taken as inputs. Then the relevant Rules as per Rule 2(k) read as under [(k) input means - (i) all goods used in the factory by the manufacturer of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e final product; or X X X but excludes - X X X (E) any goods, such as food items, goods used in a guesthouse, residential colony, club or a recreation facility and clinical establishment, when such goods are used primarily for personal use or consumption of any employee; and (F) any goods which have no relationship whatsoever with the manufacture of a final product. Definition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Final product as per Rule 2(h) Rule-2(h) of the Rules - Final product means excisable goods manufactured or produced from input, or using input service As enumerated above, ice creams being foods items are not eligible for credit. Further as excluded from the definition of inputs as used for consumption by employees. Also the items are not integrally connected with the manu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facture of excisable goods. In my view credit is not allowed. - Reply By Ganeshan Kalyani - The Reply = Thanks Sri Himansu Sir for sharing your views.Thanks - CENVAT CREDIT ON ICE CREAM. - Query Started By: - sanjeev jadhav Dated:- 17-4-2017 Central Excise - Got 13 Replies - Central Excise - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... 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