Cenvat credit on Weighbridge difference

[Asked by Guest]

The percentage of Weighbridge difference that is allowed for Cenvat credit is----------------------------

[KASTURI SETHI]

Cement - 1% error permissible on net quantity by weight

Circular No. 876/14/2008-CX, dated 20-10-2008

[MUKUND THAKKAR]

your product please ...

Cement. In respect or raw material, what is the % of Weighbridge difference that is allowed for availing Cenvat Credit?

[KASTURI SETHI]

Modvat/Cenvat - Inputs gone in waste - Credit on inputs gone in waste during process of repacking of detergent powder not deniable

The Supreme Court Bench comprising Hon’ble Mrs. Justice Ruma Pal and Hon’ble Mr. Justice Ashok Bhan on 7-10-2002 after condoning the delay dismissed the Civil Appeal No. D17281 of 2002 filed by Commissioner of Central Excise, Delhi against CEGAT Order No. A/373/2002-NB, dated 7-3-2002 and reported in 2002 (150) E.L.T. 175 (Tri. - Del.) =  2002 (3) TMI 176 - CEGAT, NEW DELHI (Commissioner v. I.P.F. Vikram India Ltd.). While dismissing the appeal, the Supreme Court passed the following order :-

“Delay condoned.

The civil appeal is dismissed on merits”.

The Appellate Tribunal in its impugned order had held that for the purpose of Modvat, where process of repacking the bulk detergent powder into small containers amounts to manufacture, credit on inputs gone in waste during the process not deniable.

[Commissioner v. I.P.F. Vikram India Ltd. - 2003 (153) E.L.T. A303 (S.C.) = 2002 (10) TMI 791 - SUPREME COURT]

[KASTURI SETHI]

Clear-cut percentage is not available. In view of the decision of the Supreme Court and Board's circular, analogy can be applied.

[YAGAY and SUN]

Commissioner of Central Excise, Nagpur Versus M/s. ACC Ltd.

[KASTURI SETHI]

Thanks to M/S. YAGAY AND SUN for posting specific case law.

AI Summary

Cenvat credit on weighbridge variance: permissible error recognized and credit for inputs lost during processing remains allowable.
Cenvat credit for weighbridge differences in cement is governed by Board circular guidance recognizing a permissible weighment error and by precedential authority that credit on inputs lost or consumed in processing (such as waste in repacking where repacking amounts to manufacture) is not automatically disallowed; no single uniform percentage is prescribed and allowances should be applied by analogy to transaction facts.