Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2016 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (1) TMI 263 - AT - Central ExciseCENVAT Credit of Free supply - MRP based valuation - manufacture of razor and razor blades - inclusion of duty free blades and availing Cenvat Credit - Held that:- There is no dispute regarding valuation of final products cleared. There is no allegation of short payment of duty on account of non-inclusion of free supplied blades in the valuation of final products viz. razor blade combo packed together. Still, the department went ahead and denied the credit on the blades under the provisions of Rule 6(1) of the Cenvat Credit Rules, 2004. It is clear that Rule 6(1) will apply in respect of the inputs used in or in relation to the manufacture of exempted goods. Now, it would appear that the department equated the supposed "free" blades with exempted goods. Otherwise, Rule 6(1) has no relevance. Calling a free supplied good as exempted goods is legally unsustainable - there is no under-valuation or short payment of duty on the final products cleared, which includes the free supplied blades. Equating such free supply to exempted clearance is untenable as already explained. As such, the provisions of Rule 6 of the Cenvat Credit Rules, 2004 has no application here. - Impugned order is unsustainable - Decided in favour of assessee.
|