Case Law Details
Pepsico India Holdings Ltd Vs Commissioner of GST & Central Excise (CESTAT Chennai)
Introduction: The recent PepsiCo India Holdings Ltd vs Commissioner of GST & Central Excise case, adjudicated by the CESTAT Chennai, has brought to light interesting nuances concerning the application of duty on goods. The Tribunal found that PepsiCo India, having reversed its ineligible credit, should not be denied the concession to pay a lower duty rate of 1% on fruit pulp.
Analysis: The key issue in the dispute revolved around PepsiCo India’s availing of the CENVAT credit on inputs and input services while also opting to pay the central excise duty on ‘fruit pulp or fruit juice-based drinks’ at 1%. However, the company reversed the credit voluntarily and paid interest on it, thus complying with the conditions of the notification. The Hon’ble Tribunal concurred with the opinion of the appellant’s counsel and cited similar precedent judgements to establish that once ineligible credit is reversed, a claim for exemption on duty cannot be denied. Therefore, the Tribunal ruled that PepsiCo India was indeed eligible to discharge the duty at a reduced rate of 1%.
Conclusion: This ruling affirms the principle that the reversal of ineligible credit ought to be considered when assessing duty payment conditions. The tribunal’s decision in favour of PepsiCo India underscores the necessity of closely adhering to statutory notifications and guidelines. It also sets an important precedent for future cases where a similar situation of duty claim and ineligible credit reversal may occur. PepsiCo’s proactive credit reversal played a crucial role in the outcome of this case, reiterating the importance of businesses taking steps to comply with regulatory conditions.
FULL TEXT OF THE CESTAT CHENNAI ORDER
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