TaxTMI 
TaxTMI 
2018 (4) TMI 1159
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....exemption under Notification No. 3/2001-CE dated 1.3.2001. The appellants were using plastic crates printed as „Coke/ Coca Cola‟ as transportation / packing materials for both the dutiable as well as exempted goods. It was noticed that the appellants were taking the entire CENVAT credit on the plastic crates on the duty paid irrespective of the fact that they were using for both dutiable and exempted final products. The department was of the view that the appellant did not maintain separate accounts for the receipt of plastic crates used for both dutiable and exempted final products. Show cause notice was issued proposing to demand duty along with interest and also for imposing penalties. After due process of law, the original a....
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....ctory, all underlying conditions as stated under the CENVAT Credit Rules are fulfilled by the appellant to justify their claim of CENVAT credit availed on crates. That appellants have not claimed CENVAT credit twice on receipt of used plastic crates when they returned for reuse into the factory. Till 31.3.2000, no MODVAT credit was admissible on the glass bottles and plastic crates used as packing materials in the beverage industry. In addition to this, most of the crates purchased before 31.3.2000, on which no MODVAT / CENVAT was taken. For the crates purchased with effect from 1.3.2001 meant for use in the manufacture of dutiable and exempted products, the appellants maintained separate accounts. Out of 7,06,581 numbers of crates purchase....
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....tributed to crates used for packing exempted goods. The appellants promptly replied vide their letter dated 29.5.2003 and clarified their position with regard to all the queries raised. No further action was taken by the department and the appellant was under the impression that the matter is closed. Subsequently, after a lapse of 31 months, the present show cause notice has been issued raising demand of 8% on the sale value of exempted goods for the period April 2001 to March 2003 invoking extended period that the department was in full knowledge of the facts and the appellant is not guilty of any suppression of facts and therefore the demand raised invoking extended period is not sustainable in the eyes of law. 4. The ld. AR Shri K.P. Mu....
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....the old and used crates come back to the factory premises for re-use. Relevant extract from the Annual Accounts of the Noticee is enclosed herewith as Annexure-III indicating the estimated life of crates as eight years. 12. The subsequent return of crates from the market place to factory premises and its usage in the packing of finished goods can be considered as usage of non-excisable inputs in the packing of finished goods inasmuch as the duty paying character of the virgin crates gets lost during its first usage in the packing activity which results in payment of duty. In absence of any specific provision under the Cenvat Rules and more specifically under Rule 6 (1) or 6 (2) of the Cenvat Rules to maintain any records for such old and u....
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....of the appellants, they are not covered by any duty paying documents and are therefore, not inputs in terms of Rule 2(g) of CCR, 2002. The provisions of Rule 6(2) and 6(3) of CCR, 2002 applied only to inputs received under cover of prescribed duty paying documents and on which the manufacturer of final products could avail cenvat credit. Therefore, used crates though continued to serve the purpose of input in the manufacture of final product, they were not inputs for the purpose of Rule 6 of CCR, 2002. The inputs envisaged in Rule 6 of the CCR, 2002 are new crates in the instant case. The appellants have argued that they had fulfilled the requirement of Rule 6(2) of CCR, 2002 as regards the new crates received by them and therefore, no liab....