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of <h1>High Court affirms Tribunal ruling on excise duty rules for aerated drinks manufacturer</h1> <h3>Commissioner of Central Excise Versus Customs, Excise And Service Tax Appellate Tribunal, M/s Pepsico India Holdings Pvt Ltd</h3> Commissioner of Central Excise Versus Customs, Excise And Service Tax Appellate Tribunal, M/s Pepsico India Holdings Pvt Ltd - 2015 (323) E.L.T. 323 (Mad.) Issues:1. Interpretation of Rule 57CC of Central Excise Rules, 1944 regarding cenvat credit on inputs for dutiable and exempted products.Analysis:The appellant challenged the Tribunal's decision allowing the appeal filed by the assessee regarding the payment of duty under Rule 57CC of the Central Excise Rules, 1944. The respondent, a manufacturer of aerated water and fruit juice drinks, availed Cenvat credit on various inputs used in production. The dispute centered on the respondent's compliance with Rule 57CC(9) by maintaining separate accounts for dutiable and exempted products. The appellant argued that the respondent failed to follow the prescribed procedure, leading to a demand for payment of duty at 8% of the value of exempted produce. The respondent contended that they had reversed the credit on common inputs before the relevant amendment, citing the decision in Hello Mineral Water Pvt. Ltd. v. Union of India and Chandrapur Magnet Wires Pvt. Ltd. v. Collector. The Tribunal relied on these decisions to set aside the demand, prompting the appellant's appeal before the High Court.In its analysis, the High Court examined Rule 57CC, emphasizing the requirement for separate accounts when using inputs for both dutiable and exempted products. The Court noted that the Finance Act, 2010 introduced an amendment to Rule 6 with retrospective effect from September 2004, providing a mechanism for adjusting credit on inputs used in exempted final products. The Court highlighted the significance of maintaining separate accounts under Rule 57CC(9) to avoid liability for 8% payment on exempted products' value. The Court referenced the decision in CCE v. ICMC Corporation Ltd., which echoed the principles laid down in the Finance Act, 2010, and the related case law. The Court concluded that the respondent's reversal of credit prior to the amendment aligned with the legal requirements, as established by previous judgments, leading to the dismissal of the appeal.In conclusion, the High Court upheld the Tribunal's decision based on established legal principles and precedents, determining that the appellant's appeal lacked merit. The Court ruled in favor of the respondent, emphasizing the importance of compliance with Rule 57CC and the relevant statutory provisions. The judgment highlighted the significance of maintaining separate accounts and following the prescribed procedures to avoid liability for duty on exempted products. The Court's thorough analysis and reliance on legal precedents ensured a fair and informed decision in the matter.
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