Circular No. 721/37/2003-Central Excise
6th June, 2003
F.No.267/135/96-CX.8
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
Subject : Central Excise- Payment of duty on waste package/ containers used for packing Modvatable inputs when cleared from the factory of the manufacturer availing Modvat/ CENVAT credit – regarding.
I am directed to refer to Board’s Circular No. 470/36/99-CX dated 19.7.99 on the above subject whereby the field formations were informed that the Department’s appeal against the CEGAT order in case of M/s. West Coast Industrial Gases Ltd. Vs. Commissioner of Central Excise has been admitted by the Supreme Court. Accordingly, they were asked to take necessary action to safeguard revenue interest.
2. The said appeal has now been decided by Supreme Court. The Apex Court has held that no duty could be demanded on the containers used for the packing of inputs, on which credit has been taken, when cleared from the factory of the manufacturer availing credit as these containers could not be treated as scrap or waste arising out of the manufacturing process. Similarly, reversal of credit either on proportionate basis or otherwise is also not required as the utilization of input on which cr edit has been taken is not in dispute.
3. Accordingly, it is clarified that no duty shall be payable and no reversal of credit is also warranted on waste package /containers used for packing inputs, on which credit has been taken, when cleared from the factory of the manufacturer availing Modvat/ CENVAT credit. Consequently, Circular No. 470/36/99-CX dated 19.7.99 may be treated as withdrawn. Pending cases if any, may be decided accordingly.
4. Trade and field formations may please be informed suitably.
5. Receipt of the same may please be acknowledged.
6. Hindi version will follow.
Vijay Mohan Jain
Under Secretary to the Government of India
