Court rules re-usable beverage containers not subject to excise duty. Appeals dismissed.

The High Court held that glass bottles and crates used for selling beverages, which are re-usable, are not exigible to excise duty. The Court emphasized that excise duty cannot be imposed on containers when there is a factual finding that only beverages are sold without the bottles and crates. As a result, the appeals (CEA Nos. 114 and 115 of 2011) were dismissed, with a direction to place a copy of the order on the file of the connected appeal.

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Issues:
Whether glass bottles and crates used for selling beverages and are re-usable are exigible to excise duty or not.

Analysis:
The appeals (CEA Nos. 114 and 115 of 2011) under Section 35 G of the Central Excise Act, 1944, raised the issue of whether glass bottles and crates used for selling beverages, which are re-usable, are liable to excise duty. The assessee-respondents, engaged in manufacturing aerated water and beverage syrup, purchased glass bottles and crates, claiming Cenvat Credit. The aerated water filled in these bottles was supplied to dealers, and after sale, the empty bottles were returned. The Order-in-Original and subsequent decisions favored the assessee, stating that only beverages were sold to consumers, not the bottles and crates. This factual finding led to the conclusion that no excise duty was chargeable on the bottles and crates.

The High Court, comprising Mr. Justice M.M.Kumar and Mr. Justice Ajay Kumar Mittal, heard the arguments at length. The Court emphasized that when there is a clear factual finding that only beverages are sold without the bottles and crates, excise duty cannot be imposed on the containers. In such a scenario, no question of law, let alone a substantive one under Section 35G of the Act, arises, rendering the appeals unsustainable. Consequently, both appeals were dismissed, with a direction to place a copy of the order on the file of the connected appeal.

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