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2020 (2) TMI 1014 - AT - Central ExciseCENVAT Credit - common input services used for providing taxable as well as non-taxable outputs - leftover of packing material - exempt goods or not - Rule 6 (3)(1) of CCR 2004 - whether the leftover of the packing material which was used by the Appellant to pack the Tires and Tubes manufactured by them is such exempted/non-excisable goods due to which Rule 6 CCR, 2004 is applicable? HELD THAT:- Apparently and admittedly, the goods as have been objected by the department are not the manufactured goods. These are merely the inputs that too in the form of the material used by the Appellant to pack their final product. This particular observation is sufficient to hold that the impugned goods i.e. plastic scrap, used empty jumbo bags, sweeping garbage, MS Iron, empty drums, MS scrap, etc. do not fall in the category of goods manufactured by the Appellant. Irrespective the leftover of the packing material is being cleared by the Appellant against the consideration, these goods is not at all sufficient to hold the same to be called as the manufactured good of the Appellant. In the case of UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT] Hon'ble Apex Court while explaining the meaning of manufacture as contained in Section 2F of the Central Excise Act, 1944 has held that any waste emerging compulsorily during the procedure of manufacture cannot be called as the manufactured products. As such the Rule 6, CCR is not applicable - In view of the prior Circular of the department bearing No. 721/37/2003-CX dated 06.06.2003, it can be opined that explanation I to Rule 6 CCR, 2004 has been added to circumvent the outcome of the decision of Hon'ble Apex Court in UNION OF INDIA VERSUS DSCL SUGAR LTD. [2015 (10) TMI 566 - SUPREME COURT]. Accordingly, the confirmation of demand of ₹ 5,72,598/- on the left over/scrap of the input used by the Appellant, since Rule 6 is not applicable, the demand is not sustainable - demand set aside. Demand of ₹ 3722/- with respect to common input services used for taxable as well as non-taxable services - HELD THAT:- Since there is no denial for the Services as that of advertising services, legal services, director's fee, business auxiliary, etc. to be the common input services used by the Appellant in or in relation to the manufacture of their final product. There are no infirmity when the adjudicating authority below has confirmed the demand under Rule 6 CCR, 2004 to that extent the order under challenge is liable to be upheld - Demand upheld. Appeal allowed in part.
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