Pepsico (I) Holdings Pvt. Ltd. Vs Commissioner of CE & ST (CESTAT Mumbai)
CESTAT Mumbai held that as the appellant has duly reversed the CENVAT Credit on inputs used in respect of finished goods contained in the broken bottles of beverages, the appellant is not liable to pay excise duty on the same.
Facts-
The appellants were engaged in the manufacturing of aerated water at Roha plant. The aerated water manufactured by them is bottled in glass bottles. In their store the goods manufactured by them as well as other units (received on payment of duty) are stored. During the course of handling and storage some of the glass bottle break which are removed to scrap yard. Appellant reversed amount of Rs 5,47,217/- in September 2010, towards the CENVAT credit availed on such breakages.
The revenue issued show cause notices proposing to recover excise duty in respect of these breakage treating them as finished goods beverages, along with interest and penalty.
The same was confirmed vide the impugned order. Accordingly, being aggrieved, appellants preferred the present appeal.
Conclusion-
Held that the reliance placed by the Commissioner (Appeal) on the Circular dated 09.07.2010 to decide the issue against the appellant for the period prior to issuance of the said circulars is contrary to the fact that during the period of dispute there were two circulars of 1971 and 1975 which have been followed by the appellant. It is not even stated in the impugned order that these two circulars were not applicable to the appellant. It is also noted that the MODVAT credit scheme was introduced in the year 1986 and CENVAT credit scheme is refined form of the said scheme. These circulars continued to hold field throughout till 09.07.2010. Observations made by the Commissioner (Appeal) in para 8 of the impugned order cannot be sustained for this simple reason. However, we also note that substantial compliance with the circular of 2010 has been made by the appellant by reversing the CENVAT Credit on the inputs used in respect of the finished goods contained in the breakages. Thus, in our view, taking note of the reversal made, the impugned order cannot be sustained.
FULL TEXT OF THE CESTAT MUMBAI ORDER
These appeals are directed against orders-in-appeal of Commissioner (Appeals), Mumbai-III & II as detailed in table below:
