C.C.E.& S.T. Rohtak vs M/S. Aradhana Soft Drinks

[Arising out of Order-In-Appeal No. 619/SVS/RTK/2013, dated 25.11.2013 passed by CCE (Appeals) Gurgaon]

For approval and signature:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3 Whether Their Lordships wish to see the fair copy of the Order?

4 Whether Order is to be circulated to the Departmental authorities?

C.C.E.& S.T. Rohtak ...Appellant

Vs.

M/s. Aradhana Soft Drinks Respondent

Appearance:

Mr. R.K. Mishra, DR for the Appellant

Ms. Sukriti Das (Advocate) for the Respondent

CORAM:

Hon'ble Mr. S.K. Mohanty, Member (Judicial)

Date of Hearing.29.07.2015

Final Order No. 53997/2015_

Per S K Mohanty:

Brief facts of the case are that the Respondent is engaged in the manufacture of aerated water and Beverages syrup falling under Chapter 21 & 22 respectively of the Central Excise Tariff Act, 1985. The Respondent avails cenvat credit of Central Excise duty paid on the inputs and capital goods used in or in relation to manufacture of the said final products. During the disputed period, the Respondent had purchased glass bottles and crates for marketing the finished products such as soft drinks and availed cenvat credit of Central Excise duty paid on those goods. The empty glass bottles and plastic crates were removed to the sister concern for marketing product such as aerated water and beverages syrup etc., without reversing cenvat credit. The Department initiated proceedings against the Respondent on the ground that the Respondent was required to reverse an amount equal to the credit taken on such inputs in terms of Rule 3(5) of the Cenvat Credit Rules, 2004. The SCNs issued in this regard culminated in the adjudication order dated 15.05.2013 wherein cenvat credit demand amounting to Rs. 3,75,592/- along with interest was confirmed and equal amount of penalty was imposed on the Respondent. In appeal, the Commissioner (Appeals) has set aside the adjudged demand and allowed the appeal in favour of the Respondent herein. Feeling aggrieved with the impugned order dated 25.11.2013, the Revenue appellant is in appeal before this Tribunal.

2. Heard the Ld. Counsel for both the sides and perused the records.

3. It is an admitted fact on record that used glass bottles and crates returned by the customers to the Respondent were removed to its sister unit under proper challans. Since, no new bottles/ plastic crates received in the factory of the Respondent were removed to its sister concern as such the provisions of Rules 3(5) of the Cenvat Credit Rules, 2004 will not applicable to such situation, inasmuch as the said provisions mandates payment of amount equal to cenvat credit, in the eventuality, when the inputs or capital goods are removed as such from the factory. I also find that based on the available records, the Commissioner (Appeals) has held that used bottles were removed from the factory of the Respondent, for which no reversal of Cenvat Credit is called for. Further, the Commissioner (Appeals) has also held that even if bottles and crates are capable for repeated use, but the same cannot be considered as capital goods, since the definition does not cover packing material within its purview for consideration as capital goods.

4. In view of above, I do not find any infirmity in the impugned order, and thus, dismiss the appeal filed by the Revenue.

(Operative portion of the order pronounced in open court)

(S. K. Mohanty)

Member(Judicial)

Neha

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