Commissioner Of Central Excise vs M/S. Aradhna Soft Drinks Co

[Arising out of Order-In-Appeal No. 567/SVS/RTK/2013 dated 24/10/2013 passed by Commissioner of Central Excise (Appeals), Delhi III ]

For approval and signature:

Honble Mr Ashok Jindal, 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?

Commissioner of Central Excise Appellants

Delhi V (Rohtak)

Vs.

M/s. Aradhna Soft Drinks Co. Respondent

Appearance:

Shri R K Mishra, AR for the Appellants

Ms Sukriti Das, Advocate for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 10.4.2015

FINAL ORDER NO. A/ 51437 /2015-(SM)

Per Ashok Jindal :

The Adjudicating authority vide OIO No. 78/CE/ADC/AKR/2012 dated 28.12.2012 had discussed the issue of reversing of an amount equal to the Cenvat Credit on the sale of scrap of glass bottles. During the period 2006-2007 to January- 2011, the party had cleared the broken glass bottles collectively valued at Rs.79,32,529/- without payment of Central Excise duty amounting to Rs.11,17.998/-. As the scrap of glass is classifiable under Chapter Heading 7001 of the schedule to the CETA and attract Central Excise Duty. Thus, the party had contravened the provisions of Rule 8 of Central Excise Rules, 2002. Accordingly, duty amount of Rs.11,17,998/- was confirmed in the OIO and equal amount of penalty was imposed by the original authority, against which the party had gone in appeal before the Commissioner (Appeals).

Whereas the Commissioner (Appeals) while passing the final order in the instant case has decided on the issue whether the appellant is required to reverse the credit in respect of the durable and returnable glass bottles and crates retained/ not returned by the buyer of the soft drinks. He also relied upon a case law in the case of CCE Ludhiana vs. M/s. Ludhiana Beverages Pvt. Ltd. [2009 (247) ELT 790 (Tri-Del). The issue therein was that

? The party is a manufacturer of Beverages and they are removing the same in glass bottles which in turn are kept in crates and dispatched to the dealers. There is an arrangement for return of empty bottles along with crates. The respondent have taken certain deposits to ensure the safe return of empty bottles and crates. In the event of bottles getting broken and the crates not being returned, the respondents is enforcing the agreement and recovering value of the bottles and the crates and appropriate the amount from the securities given by them. The bottles and crates are included in the term packing material and treated as input and Cenvat credit has been taken on these materials. Though they are included in the terms inputs, these are normally meant for repeated use. The original authority held that the party has recovered the amount of Rs. 8,99,035/- during the period September, 2004 to December, 2004 on bottles received back and holding that there was sale of these bottles, confirmed demand of Rs. 1,46,722/- along with interest and imposed equal penalty. Commissioner (Appeals) dropped the proceedings.

In this case, Boards Circular No. 697/13/2003-CX., dated 27-2-2003 has also be relied upon by the Honble CESTAT which is only dealing with the valuation of the goods and not with the reversal of Cenvat Credit on the scrap of glass bottles on which the credit has been taken as inputs. The Boards Circular No. 643/34/2002-CX dated 1.7.2002 deals with the issue of fixing MRP / assessable value of aerated water and is not regarding reversal of Cenvat Credit on the scrap, which is the main issue in this case.

That the Commissioner (Appeals) has erred in relying upon the Honble CESTATs order in the case of CCE Ludhiana vs. M/s. Ludhiana Beverages (P) Ltd. and Boards Circular No. 697/13/2003 CX dated 27.2.2003 which are not relevant to the matter in the instant case. The Boards Circular deals with the valuation of goods under Section 4A of the Central Excise Act which is not the dispute in the present case.

Heard the parties.

On perusal of the issue before the learned Commissioner (Appeals) where the appellant is required to pay duty on the crates and glass bottles broken during the process of filing and packing of soft drinks or not whereas the learned Commissioner (Appeals) has decided the issue whether the respondent is required to reverse the credit in respect of durable and reuseable glass bottles and crates returned by the buyers of the soft drink. Learned Commissioner (Appeals) has erred in deciding the issue. Therefore, impugned order is set aside and I remand the matter to the adjudicating authority to decide the issue as prayed by the Revenue in their appeal. Accordingly, matter is remanded back to the learned Commissioner (Appeals) and to decide the issue as discussed hereinabove.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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