Star Battery Limited Vs Commissioner of Central Tax (CESTAT Kolkata)
Excise Demand Set Aside Because Inputs Were Cleared for Conversion and Not Trading; Rule 3(5) Compliance Accepted Since Assessee Reversed Credit on Inputs Sent to Job Worker; Cenvat Credit Demand Quashed Due to Lack of Evidence of Trading Transactions; Extended Limitation Invalid Because Transactions Were Properly Disclosed in ER-1 Returns.
In Star Battery Limited Vs Commissioner of Central Tax, the Kolkata Bench of CESTAT considered an appeal concerning denial of Cenvat credit on granules used for manufacturing PPCP containers through job workers. The appellant manufactured batteries and required PPCP containers for sale of the finished goods. Since the appellant did not have the facility to manufacture PPCP containers, cenvat-availed granules were cleared to job workers under Rule 3(5) of the Cenvat Credit Rules, 2004 after reversing the credit. The job workers manufactured PPCP containers, paid excise duty on them, and the appellant availed Cenvat credit on the duty paid containers.
The Department alleged that the appellant had cleared the granules for trading purposes and wrongly availed Cenvat credit. The lower authority confirmed the demand. The appeal before the Commissioner (Appeals) was dismissed on limitation because of delayed filing. Pursuant to directions of the Calcutta High Court, the appellant deposited 25% of the demand and approached the Tribunal.
