M/S. Pepsico India Holding Pvt. Ltd vs C.C.E & S.T. Meerut-Ii

[Arising out of Order-in-Appeal No. 56-CE/MRT-II/2006 dated 31.03.2006 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Meerut].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

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?

M/s. Pepsico India Holding Pvt. Ltd. .Appellants

Vs.

C.C.E & S.T. Meerut-II .Respondent

Appearance:

Shri Amit Jain, Advocate for the Appellant

Shri Pramod Kumar, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Hon'ble Shri B. Ravichandran, Member (Technical)

Date of Hearing: 17.08.2015

FINAL ORDER NO. 52605/2015-EX(DB)

Per Ashok Jindal:

The applicant is manufacturer of aerated water, soda water and mineral water. For packing of the aerated water appellant procured glass bottle as input an availing Cenvat Credit thereon. During the packing of aerated water some glass bottles got broken and same were cleared as scrap without payment of duty.

2. Revenue is of the view and these broken glass bottle are scrap and same is liable to pay duty thereon. Therefore, impugned proceedings were initiated against the appellant for the period October 2002 to June 2005 to demand duty on the value of broken glass bottles cleared by them without payment of duty. Both the lower authorities confirmed the proposal made in the show cause notice and demanded duty along with interest and equivalent amount of penalty was also imposed. Aggrieved from the said order appellant is before us.

3. The Ld. Counsel for the appellant pleaded that in their own case for the earlier period vide order no. 51702/2015 dated 16.04.2015 it was held that appellant is not liable to pay duty. Therefore, impugned order be set aside.

4. On the other hand, Ld. AR reiterated the findings of the impugned order.

5. Heard the parties. Considered the submission.

6. In appellants own case for the earlier period this Tribunal has observed as under:

The point of dispute in this case is as to whether the glass bottles which were used for filling/packing of the aerated waters and which in course of manufacture of aerated waters were broken, and were cleared as glass scrap are excisable. The departments contention is that since, CENVAT Credit had been taken in respect of the glass bottles, at the time of clearance of glass scrap, duty would be payable. However, we find that during the period of dispute there was no provision in the CENVAT Credit Rules, 2001/2002 providing that when CENVAT Credit availed inputs are cleared as waste, some amount in respect of the same is required to be paid. It is only sometime in 2005 that Rule 3 (5) was introduced in CENVAT Credit Rules, 2004 specifically, providing that when CENVAT Credit has been taken in respect of certain inputs or capital goods and the same are cleared as waste or scrap, an amount as specified in that sub-rule would be payable. During the period of dispute, there was no such provision. Moreover, the department in these cases, has demanded Central Excise Duty by treating glass waste as manufactured product and this issue has been examined in the Tribunals judgment cited by the ld. Counsel for the appellant on the basis of the section 2 (d) of the Central Excise, Act, 1944. In view of this, we hold that the judgment of the Tribunal in the case of Commissioner of C. EX., Delhi Vs. Dhillon Kool Drinks & Beverages Ltd. (supra) the civil appeal against which has been dismissed by the Apex Court vide judgment reported in 2002 (144) ELT A 210 SC and also judgments of Tribunal in the cases of Hindustan Coca-Cola Beverages Pvt. Ltd. Vs. Commr. Of EX., Mumbai reported in 2003 (159) ELT 938 (Tri-Mumbai, Ponna Bottling Co. Ltd. Vs. Commissioner of Central Excise, PUNE-II reported in 2001 (134) ELT 445 (Tri-Mumbai), Charminar Bottling Co. (P) Ltd. Vs. Commissioner of C. EX., Hyderabad reported in 2001 (134) ELT 179 (Tri-Del.), would be applicable to the facts of this case. The impugned order is, therefore, not sustainable. The same is set aside. The appeal is allowed.

7. We also find that appellant is manufacturer of aerated water not glass bottles and these glass bottles have been broken during the packing of the aerated water which is scrap generated during the manufacturing of final product i.e. aerated water. Therefore, we hold that appellant is not manufacturing broken glass bottles which is merely a scrap. Therefore relying on the appellants own case for the earlier period we hold that appellant is not entitled to pay duty on broken glass water. Consequently, impugned order is set aside. Appeal is allowed with consequential relief, if any.

(Dictated and pronounced in the open court)

(B. Ravichandran) (Ashok Jindal) Member (Technical) Member (Judicial)

Bhanu

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E/2650/2006-EX(DB)