M\/s. Anil Fireworks Factory Versus Commissioner of GST & Central Excise Madurai
Central Excise
2018 (12) TMI 724 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 10-12-2018
Appeal No. E\/41389\/2018 – Final Order No. 43070\/2018
Central Excise
Ms. Sulekha Beevi C.S., Member (Judicial)
\nShri S. Ramachandran, Consultant for the Appellant
\nShri L. Nandakumar, AC (AR) for the Respondent
\nORDER
\nBrief facts are that during the audit of accounts, it was noticed that the appellant had taken CENVAT credit of ineligible inputs namely fireworks purchased from their other units. The department was of the view that such fireworks purchased by other units and packed with their own products and cleared as a gift pack is not eligible for credit. According to department Rule 16(1) of Central Excise Rules 2002 is to be applied and therefore the goods purchased from other sister concern when being packed, the activity did not amount to manufacture as per Chapter Note to third sche<\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ment is of the view that there is process of manufacture involved in packing the gift box by combining various firework items and therefore has denied credit. It is submitted by him that appellants included the value of the fireworks purchased from other manufacturers to arrive at the value of gift boxes which were cleared on payment of duty. Therefore, the fireworks purchased from other manufacturers are inputs for the appellants. The show cause notices propose to recover the credit availed on fireworks which are purchased from outside manufacturers. Since the value of the goods cleared by the appellant (the gift combo boxes) includes the value of the goods which are purchased from outside manufacturers, the appellant is eligible to avail the CENVAT credit. He relied upon the following case laws:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he assessable value of the final product \/ gift boxes cleared by them. The definition of inputs for the relevant periods read as under:- = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t to be used directly in the manufacture and also not required to be contained in the final product but if it is used even in relation to the final product credit should be allowed. In the present case the playing cards indeed supplied alongwith final product it fulfilled the criteria of inputs, therefore credit cannot be denied of the duty paid on playing cards. Though there are contrary judgments on this issue but comparing the judgments of both the sides, I find that Tribunal's Single and Division Bench in cases Cello Home products (supra) and G.S. Enterprises (supra) respectively held that items supplied along with final product for sale promotion have been considered as input and Cenvat credit was allowed. In the case of Prime Health Care Products (supra) Hon'ble Gujarat High Court on the identical issue also allowed the credit in respect of bought out tooth brush supplied along with tooth paste manufactured by the assessee. The Hon'ble High Court has allowed the Cenvat credit on <\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ed as inputs under the CENVAT Credit Rules, 2002 and utilise this credit according to the said rules. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" M\/s. Anil Fireworks Factory Versus Commissioner of GST & Central Excise MaduraiCentral Excise2018 (12) TMI 724 – CESTAT CHENNAI – TMICESTAT CHENNAI – ATDated:- 10-12-2018Appeal No. E\/41389\/2018 – Final Order No. 43070\/2018Central ExciseMs. Sulekha Beevi C.S., Member (Judicial) Shri S. Ramachandran, Consultant for the Appellant Shri L. Nandakumar, AC (AR) for the Respondent ORDER Brief … Continue reading “M\/s. Anil Fireworks Factory Versus Commissioner of GST & Central Excise Madurai”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15511","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15511"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15511\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\na. Cello Home Products Vs. Commissioner of Central Excise, Daman – 2012 (284) ELT 52 (Tri. Ahmd.)
\nb. Manik Machinery Manufacturers Pvt. Ltd. vs. Commissioner of Central Excise, Mumbai – 20<\/p>\n
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\n“(k) “input” means –
\n(i) all goods used in the factory by the manufacturer of the final product; or
\n(ii) any goods including accessories, cleared along with the final product, the value of which is included in the value of the final product and goods used for providing free warranty for final products”
\nThe definition thus show that not only the inputs that is used for manufacture of final products but also those goods cleared whose value is included in such final product will come within the definition of inputs. Further, all goods used in the factory by the manufacturer of the final product would come within the definition. This means any goods used by manufacturer within the factory is input. The words used are 'by the manufacturer' and not 'for the manufacture'. The authorities below have erred in interpreting that in order to qualify as inp<\/p>\n
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\n(2) If the process to which the goods are subjected before being removed does not amount to manufacture, the manufacturer shall pay an amount equal to the CENVAT credit taken under sub-rule (1) and in any other case the manufacturer shall pay duty on goods received under sub- rule (1) at the rate applicable on the date of removal and on the value determined under sub-section (2) of section 3 or section 4 or section 4A of the Act, as the case may be.
\n[Explanation. – The amount paid under this sub-rule shall be allowed as CENVAT credit as if it was a duty paid by the manufacturer who removes the goods.]
\n(3) If there is any difficulty in following the provisions of sub-rule (1) and sub-rule (2), the assessee may receive the goods for being re-made, refined, re-conditioned or for any other reason and may remove the goods subsequently subject to such conditions as may be specified by <\/p>\n
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