VST Industries Ltd Versus CCT, Secunderabad – GST
Central Excise
2019 (2) TMI 403 – CESTAT HYDERABAD – TMI
CESTAT HYDERABAD – AT
Dated:- 19-11-2018
Appeal No. E/30609/2018 – A/31566/2018
Central Excise
Mr. P. Venkata Subba Rao, Member (Technical)
Shri S. Thirumalai, Advocate for the Appellant.
Shri N. Bhanu Kiran, Asst. Commissioner/AR for the Respondent.
ORDER
Per: P.V. Subba Rao.
1. This appeal is directed against Order-in-Appeal No. HYD-EXCUS-SCAP2- 0247-17-18 dated 09.02.2018.
2. The appellant herein is a manufacturer of cigarettes and the dispute is regarding the CENVAT credit availed on BOPP film and paper which are used for packing the cigarettes. Some part of the BOPP film and the paper become waste
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vision of exempted services or input services as is used in or in relation to the manufacture of exempted goods and their clearance up to the place of removal. Explanation (1) has been added to this Rule as follows.
“For the purpose of this Rule, exempted goods or final products as defined in clauses 'd' and 'h' of Rule 2 shall include non-excisable goods cleared for consideration from the factory.”
4. The department's contention is that in view of the explanation (1) to Rule 6 of CENVAT Credit Rules, 2004, the BOPP film and waste paper scrap, both of which are admittedly waste materials, should be treated as non-excisable goods cleared for consideration and proportionate amount of CENVAT credit has to be reversed.
5. Learned counsel wo
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as been held by the Hon'ble Tribunal in the aforesaid case laws.
6. Learned departmental representative reiterates the findings of the lower authorities and seeks to rely on the CBEC Circular No.1027/15/2016- CX dated 25/04/2016 in which it was clarified in Para 4.2 as follows.
“Consequently, Bagasse, Dross and Skimmings of non-ferrous metals or any such by-product or waste, which are non-excisable goods and are cleared for a consideration from the factory need to be treated like exempted goods for the purpose of reversal of credit of input and input services, in terms of rule 6 of the CENVAT Credit Rules, 2004.”
7. In view of the above, learned departmental representative would argue that the legal position with respect to reversal of
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