Availing benefit of Cenvat Credit on inputs, input services and capital goods under Cenvat Credit Rules, 2004.

Last updated: 03 May 2021

Save Share

Quick Summary

This case involves M/s. Sundaram Packaging India Pvt. Ltd. who were availing Cenvat credit on inputs, input services, and capital goods. During an audit, it was found they cleared non-excisable goods (empty polythene bags and drums) as waste without paying duty. Relying on a notification, the department demanded reversal of Cenvat credit on these cleared goods, along with interest and penalty. The appellant's appeals against this demand were rejected by the lower authorities.

Court :
CESTAT New Delhi

Brief :
Appellant herein M/s.Sundaram Packaging India Pvt. Ltd. is engaged in manufacture of PP woven fabrics and are also the recipient of few services as that of Goods Transport Agency Service, Manpower Recruitment Agency Service and Legal ConsultancyService etc. They were also availing the benefit of Cenvat Credit oninputs, input services and capital goods under Cenvat Credit Rules,2004. During the course of audit for the period 2016-17, Department noticed that appellant had cleared empty polythenebags of raw-material, empty drum of power oil worth Rs.33,62,307/- in the name of waste sales without payment ofduty, despite that the goods so cleared were non-excisable.

Citation :
Excise Appeal No. 51633 of 2019 [SM]

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI

PRINCIPAL BENCH – COURT NO. – III
Excise Appeal No. 51633 of 2019 [SM]

[Arising out of Order-in-Appeal No. IND-EXCUS-000-APP-052-19-20 dated
31.05.2019 passed by the Commissioner (Appeals) Customs, CGST & Central
Excise, Indore]

M/s.Sundaram Packaging India Pvt.Ltd. …Appellant
Plot No.111 to 122 & 123 to 129
Sector-III, Pithampur,
Dist. Dhar (M.P.)

VERSUS

Commissioner of Customs,
CGST & Central Excise, Ujjain …Respondent

APPEARANCE:
None appeared for the Appellant
Shri P. Juneja & Shri P.Gupta, Authorised
Representative for the Respondent

Coram: HON’BLE MRS. RACHNA GUPTA, MEMBER (JUDICIAL)

DATE OF HEARING : 19/03/2021
DATE OF DECISION: 01/04/2021

FINAL ORDER NO. 51210/2021

RACHNA GUPTA:

Appellant herein M/s.Sundaram Packaging India Pvt. Ltd. is engaged in manufacture of PP woven fabrics and are also the recipient of few services as that of Goods Transport Agency Service, Manpower Recruitment Agency Service and Legal ConsultancyService etc. They were also availing the benefit of Cenvat Credit oninputs, input services and capital goods under Cenvat Credit Rules,2004. During the course of audit for the period 2016-17, Department noticed that appellant had cleared empty polythenebags of raw-material, empty drum of power oil worth Rs.33,62,307/- in the name of waste sales without payment ofduty, despite that the goods so cleared were non-excisable.Relying upon the Notification No.06/2015 dated 01.03.2015 which says that any non-excisable goods cleared from the factory will betreated as exempted goods and Cenvat Credit will be reversed onthe same as per Rule 6 (3) of Cenvat Credit Rules. Accordingly,vide Show Cause Notice No.1729 dated 18.07.2018 the appellantwas required to reverse the amount at the rate of 6% of the valueof goods so cleared alongwith applicable interest and penalty. Thisproposal was initially confirmed by Order-in-Original No.32/AC/2018-19 dated 20 February, 2019. The appeal thereof was rejected vide Order-in-Appeal No.052-19-20 dated 31.05.2019. The said order has been assailed by the appellant before this Tribunal.

To know more in details find the attachment file

FAQ :

Cenvat Credit refers to the benefit of tax credit available on inputs, input services, and capital goods used in the manufacture of excisable goods or provision of taxable services.

The appellant cleared empty polythene bags of raw material and empty drums of power oil, valued at Rs. 33,62,307/-, in the name of waste sales.

Cenvat credit reversal was demanded because the cleared goods were considered non-excisable. According to Notification No. 06/2015, non-excisable goods cleared from a factory are treated as exempted goods, requiring Cenvat credit reversal as per Rule 6(3) of the Cenvat Credit Rules.

The initial proceedings confirmed the demand for reversal of Cenvat credit at 6% of the value of goods cleared, along with applicable interest and penalty.

The appellant has appealed the decision to the Customs, Excise & Service Tax Appellate Tribunal (CESTAT) after their appeals were rejected by the Commissioner (Appeals).

Attached File : 2539488_3569_517042019_22750.pdf

downloaded 290 times