We are procuring Raw Materials/ Stores Spares/ Chemicals/Lub Oil etc on payment of duty & taking cenvat credit on inputs/ capital goods. We generally receive the above said material packed in Corrugated Boxes/ Separators, Plastic Cans/ Cones / Barrels etc. Once the material packed in such material is consumed, the unused packing material is waste and therefore left for disposal, and we clear the same in local market without payment of duty.
Can department ask for exise duty on clearnce value of unused packing material?
Excise Duty Not Required on Waste Packing Materials Per Rule 3(4) and Supreme Court Ruling; Credit Reversal Not Applicable A discussion in a forum addressed whether excise duty is applicable on unused packing materials cleared in the local market. The initial query was about whether the department can demand duty on these materials. A participant clarified that, per Rule 3(4) of the Cenvat Credit Rules and a Supreme Court ruling, no duty is required on such waste packing materials. Another participant mentioned that according to Rule 6(3) of the Cenvat Credit Rules, reversal of credit might be necessary, but this does not apply to waste packing materials. The discussion referenced several circulars and court rulings supporting the non-liability of excise duty on waste packing materials. (AI Summary)
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