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2016 (11) TMI 1276 - CESTAT ALLAHABADCENVAT credit - recovery - Subsection 1 of Section 11A of Central Excise Act, 1944 - Held that: - the packing of sugar into 1 & 5 kgs pack is done in the factory premises. The goods when brought into such packing division are again entered into RG-I Register and subsequently packed into 1 & 5 kgs packs. The clearance of such goods from factory on payment of a specific rate of duty. The packing material on which Cenvat Credit was availed were used for packing of goods into 1 & 5 kgs. pack within the premises of factory. The ratio of the ruling of Hon’ble High Court of Chhattisgarh in the case of Advani Oerlikon Ltd. [2012 (12) TMI 266 - CHATTISGARH HIGH COURT] is squarely applicable in the present case where it was held that the item “Hot Melt Unit”was admittedly used by the assessee while packing their finished goods – “welding electrodes”. Since packing is held to be one of the essential components of the manufacturing process of the finished goods and being in the nature of incidental or/and ancillary to the main manufacturing activity, the assessee in this case was rightly held entitled to claim Modvat credit on the item- “Hot Melt Unit” treating the same as capital goods under the Rule 57Q ibid for claiming benefit. The packing is activity incidental or/and ancillary to the main manufacturing activity. Therefore, Cenvat Credit of duty paid on inputs used for packing sugar in 1kg & 5 kg packs is admissible to the appellant - appeal allowed - decided in favor of appellant.
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