TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1636
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.... final products upon fixation of brand labels owned by TCNS. They were enjoying full exemption of Central Excise duty in terms of Notification No. 30/2004 - CE dated 9.07.2004 till the end of February 2016. Notification No. 9/2016-CE dated 01.03.2016 imposed Central excise duty on all the goods falling under the Chapter Heading 62 of CETA, having brand name with retail sale price of Rs.1,000/- and above. Accordingly, TCNS got its bonded Warehouse registered under Central Excise registration and started clearing its final products from its bonded warehouse to trading warehouse upon payment of excise duty at the concessional rate of 2% by availing the benefit under Notification No. 1/2011 - CE dated 1.03.2011, as amended by notification No.9/2016-CE dated 01.03.2016. From the trading warehouse, TCS cleared the final products to the franchisees under the cover of tax invoice on payment of VAT or CST, and also to the retail outlets owned by it under cover of delivery challan on a stock transfer basis. The products were sold to the end consumers from the franchisees and the retail outlets. 3. On the basis of an audit conducted by CGST for the period October 2013 to March 2014, to 201....
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....usiness activity from the manufacturing activity. The learned Counsel relied on the following decisions:- • Girna Organics Pvt. Ltd. Vs. Commissioner of C. Ex. and S.T., Jalgaon-2017 (6) G.S.T.L. 40 (Tri.-Mumbai) • MTR Foods (P) Ltd. Vs. Commr. of C. Ex., Cus. and S.T., Bangalore-2016 (338) Ε.L.T. 764 (Tri.-Bang.) • MTR Foods Pvt. Ltd. Vs. Commissioner of Central Excise, Customs and Service Tax-2018 (2) TMI 384-CESTAT Bangalore (ii) TCNS had reversed the CENVAT Credit along with interest and reversal of it amounts to non-availment of credit. In support thereof, reliance was placed on the decision of the Apex Court in Chandrapur Magnets Wires (P) Ltd. Vs. CCE, Nagpur-1996 (81) ELT 3 (SC), which has been followed subsequently in several decisions. (iii) Central excise duty is not liable to be paid on the stock of final products cleared from warehouse prior to 1.03.2016 and lying in the retail outlets owned by the assessee. Reference was invited to the provisions of Rule 5 of Central Excise Rules, 2002 and to the following decisions :- • Wallace Flour Mills Company Ltd. Vs. Collector of Central....
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....le goods are manufactured from inputs or by utilising input services on which appropriate duty of excise has been paid and no credit of such excise duty or additional duty of customs on inputs or service tax on input services has been taken by the manufacturer of such goods under the provisions of the CENVAT Credit Rules, 2004. v) Notification No.15/2016-CE, dated 01.03.2016 withdrew the exemption available for all goods of Chapter 61, 62 and 63 of the CETA bearing or sold under a brand name and having RSP of Rs.1,000/- and above." 9. The undisputed facts are that TCNS cleared the final products received from the job workers by adopting two modes, one by clearing the final products to the various retail outlets owned by them in the country on stock transfer basis and secondly, it sold the final products to various retail outlets operated and run by the franchisee companies undercover of tax invoice on payment of VAT or CST. In both the cases, prior to 01.03.2016, the final products were cleared without payment of Central excise duty after availing full exemption under Notification No.30/2004 dated 9.07.2004 as per Entry No. 16 which exempted all the goods falling....
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....ere the excisable goods are to be sold after their clearance from the factory;]" The Central Excise Rules, 1944, especially Rule 4 and 5, which provides for duty payable on removal and the date for determination of duty and tariff valuation. The provisions of Rule 4 and 5 make it explicitly clear that duty is payable on the goods on removal from the factory/warehouse and, therefore, rate of duty shall be the rate or value as is prevalent on the date when such goods are removed from a factory or warehouse. The Rule 4 and 5 as are relevant here, are quoted below:- "Rule 4. Duty payable on removal. (1) Every person who produces or manufactures any excisable goods, or who stores such goods in a warehouse, shall pay the duty leviable on such goods in the manner provided in rule 8 or under any other law, and no excisable goods, on which any duty is payable, shall be removed without payment of duty from any place, where they are produced or manufactured, or from a warehouse, unless otherwise provided: [1A] Notwithstanding anything contained in sub-rule (1), every person who gets the goods, falling under Chapter 61 or 62 or 63 of the First Schedule to the Tariff ....
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....re, accordingly registered with the Central Excise Department as well as with Service Tax Department separately. They had availed CENVAT credit of service tax paid on the services of 'renting of immovable property', 'repair and maintenance' and 'consultancy services' and utilised the entire credit for discharging its service tax liability on the outward taxable services partly by utilising the credit and partly in cash which is reflected in ST-3 returns for the relevant period. According to the assessee, no credit was availed on the manufacturing activity which is evident by the ER-1/ER-8 returns and the GAR-7 challans (which are on record) for the relevant period. What appears is that TCNS had not availed the credit on the inputs to discharge the central excise duty liability, however, they had availed the CENVAT credit while discharging the service tax duty liability. The fact of availing and utilising the credit amounting to Rs.31,52,784/- on input services stands verified from the STRs for the period March 2016 to June 2017, however, on the issuance of the show cause notice, TCNS deposited the credit of Rs.33,20,469/- along with interest of Rs.24,38,662/- under protest on 22.07....
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....ted laminated/metalized film and pouches), which actually is a different product altogether and has no direct link with the product, instant food mixes, etc. It is to be noted that the appellants are paying full duty on the manufacture of other product namely packing material falling under Chapter 39. Cenvat credit taken in case of inputs, for the manufacture of packing material (Chapter 39) can't be wrongly linked with the manufacture of another category of goods namely Instant Food Mixes, Ready-to-eat food product, etc." 13. The proposition of law is clear that the CENVAT credit availed in respect of activity of service is not relatable to the manufacturing business, and, therefore, the assessee has not violated the condition of the notification of having availed CENVAT credit and is entitled to the benefit of the concessional rate of duty under the notification. There is no error in the impugned order to that extent. 14. Alternatively, the argument on behalf of TCNS is that, since the amount of Credit availed by them towards the output services have been reversed by them along with interest and, therefore, in view of the decision of the Apex Court in Chandrapur Magnets Wir....