GlaxoSmithKline Consumer Healthcare Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
The appeals were filed by different entities but involved a common issue and were therefore heard together and disposed of through a common order. The dispute arose from an agreement between a manufacturer and a job worker, under which the job worker received products in bulk, repacked them into smaller quantities, and returned the finished goods to the manufacturer after payment of duty on the abated MRP value. The job worker received conversion charges for this activity, while the manufacturer supplied capital goods such as plant and machinery, which were installed at the job worker’s premises.
During an audit, the Revenue observed that the capital goods used at the job worker’s premises were purchased and capitalized by the manufacturer. However, the job worker had availed CENVAT credit on these capital goods, despite the invoices being issued in the manufacturer’s name. The Revenue contended that such credit was wrongly availed because the job worker neither owned the goods nor paid for them, and the invoices were not issued in its name. This led to the issuance of a show cause notice proposing recovery of the allegedly ineligible credit along with interest and penalties, invoking the extended period of limitation on the ground of non-disclosure.
