TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 1194
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.... April 2016 to June 2017 but they failed to do so. 2.1 Accordingly, a show cause notice dated 15.10.2020 was issued to the appellant which was adjudicated vide Order-in-Original dated 15.07.2021 passed by the Adjudicating Authority. The Adjudicating Authority confirmed the demand amounting to Rs. 94,135/- payable on packing materials viz. used drums under the provisions of Section 11A(10) of the Central Excise Act, 1944 and ordered recovery of the same alongwith interest from the appellant. He also imposed penalty of Rs. 94,135/- on the appellant under the provisions of Section 11AC(1)(c) of the Central Excise Act, 1944 read with Rule 15(2) of the Cenvat Credit Rules, 2004 read with Section 174(2)(d) and (e) of the CGST Act, 2017. 2.2 Feeling aggrieved from the above mentioned Order-in-Original, appeal was filed before the learned Commissioner (Appeals). Learned Commissioner (Appeals) while passing the impugned Order-in-Appeal, came to the conclusion that in terms of the provisions of Notification No.6/2015-CE (NT) dated 01.03.2015, as the clearances of non-excisable products i.e. used packing material, effected with the consideration by the appellant and hence, it attracts r....
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....r non reversal of credit at the rate of 6%. However, both Learned Commissioner (Appeals) as well as learned Adjudicating Authority erred in confirming the demand without appreciating the amended provisions which intend that unless and until exempted goods are manufactured with non-exempted goods, applicability of Rule 6 does not arise. 3.1 Learned CA Shri Aatish Shah relied upon the order of CESTAT, New Delhi passed in M/s. Sundaram Packaging India Pvt. Limited vs. CC, CGST & Central Excise, Ujjain in appeal No. E/51633/2019 which is on the same issue as under present appeal. He has prayed that the impugned order passed by learned Commissioner (Appeals) be set-aside and appeal may be allowed. 4. Learned AR for the department reiterated the impugned Order-in-Appeal passed by the learned Commissioner (Appeals) and submitted that the learned Commissioner (Appeals) has passed the impugned order in the light of Notification No. 6/2015-CE (NT) dated 01.03.2015 and no interreference is required in the impugned order. He prayed that the appeal may be rejected and Order-in-Appeal may be upheld. 5. I have heard the learned Chartered Accountant for the appellant and learned AR for th....
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....g reasonable means consistent with the principles of valuation contained in Excise Act & Rules made thereunder." The Tribunal has held in M/s. Sundaram Packaging India Pvt. Limited vs. CC, CGST & Central Excise, Ujjain (supra) that irrespective of above mentioned amendment the scope of Rule 6 is still with respect to the inputs/ input services used in or in relation to the manufacture of exempted goods alongwith manufacture of non-exempted goods. Hence, irrespective of exempted goods include non-excisable goods in view of the amendment in terms of Notification No. 6/2015-CE (NT) dated 01.03.2015, unless and until such exempted goods are manufactured that too along with the non-exempted goods by the assessee, applicability of Rule 6 does not at all arise. There is no question of applicability of the explanation thereof as inserted vide Notification of 2015 in the present case. The Tribunal cited the decision of the Hon'ble Apex Court in the case of Union of India vs. DSCL. Sugar Limited reported in 2015 (322) ELT 769 (S.C.) that the products which do not qualify the definition of 'manufacture' in Section 2 (f) of Central Excise Act, there cannot be any excise duty for such pr....
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....cludes goods which are chargeable to "Nil" rate of duty [ and goods in respect of which the benefit of an exemption under Notification NO.1/2011-CE, dated 1-3-2011 or under entries at S. Nos. 67 and 128 of Noti. No. 12/2012-CE dt. 17-3-2012 is availed]; (h) "final products" means excisable goods manufactured or produced from input, or using input service; On plain reading of the above definition of "exempted goods" as well as "final product" it is clear that the said goods should be arising out of the manufacturing activity even though after that the said goods may or may not be excisable goods. In the present case, the packaging material since not arising out of any manufacturing process the same will not fall either under Sub-clause (d) or sub-clause (h) of Rule 2 of Cenvat Credit Rules, 2004. As regard explanation (2), it is only for the purpose of value of the non-excisable goods to calculate the payable amount under Rule 6(3). Since the goods does not fall under the explanation (1), explanation (2) will obviously not be applicable therefore, the charges made in the Show Cause Notice are not tenable. 4.1 Further, I find that an identical case has been....
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.... and 1421/2003 : 7.In view of the above order, these appeals are also dismissed. There shall be no order as to costs." In view of the above judgment, it is clear that the empty packaging material wherein, the input was received, the removal of the same will not attract any duty. The Hon'ble Allahabad High Court in the case of BALRAMPUR CHINI MILLS LTD. v/S. UNION OF INDIA (supra) on the identical issue it was held as under:- "34. In light of the above we are of the considered opinion that in absence of Bagasse being a manufactured final product, the obligation of reversal of Cenvat Credit under Rule (1) of the Cenvat Credit Rules, 2004 is not attracted, and the ratio laid down in the judgment of the Hon'ble Supreme Court in the case of Union of India and others v M/s. DSCL Sugar Ltd and Others (supra) still holds the field. Rule 6 of the Cenvat Credit Rules would have no application for reversal of Cenvat Credit in relation to Bagasse. The Circular No. 1027/15/2016-CX, dated 25-4-2016, contained in Annexure-1 to the writ petition to the extent that it includes Bagasse under the purview of the reversal of credit of input services in terms of Rule 6 of the ....