Empty Packaging Drums of Cenvat Input are 'Non-Excisable Goods': CESTAT quashes Excise Duty Demand [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), has quashed a demand for excise duty holding that the empty packaging drums of cenvatable input are “non-excisable goods” for the purpose of the Excise law.

The issue before Mr. Ramesh Nair (Judicial Member) was that whether the appellant is required to pay an amount of 6% in terms of 6(3) of the Cenvat Credit Rules, 2004 on empty packaging drums of cenvatable input considering the same as non-excisable goods.

After verifying the arguments in detail, the Tribunal found that “the lower authorities have confirmed the demand only on the ground that empty drums of cenvatable input is a non excisable goods and therefore, the clearance there of will attract 6% reversal in terms of rule 6(3) of Cenvat Credit Rules, 2004. On the identical issue this Tribunal has passed the following order in the case of Banco Gasket I Ltd.”

Allowing the claim of the appellants, the Tribunal observed that “From the above judgment it can be seen that the very identical issue has been considered and categorically held that empty packaging material of cenvatable input is not liable for payment either as excise duty or as cenvat credit under Rule 6(3) of Cenvat Credit Rules, 2004. Considering the above judgment, I hold that the appellant is not liable to make any payment on clearance on empty drums. Hence, the impugned order is set aside, appeal is allow.”

To Read the full text of the Order CLICK HERE

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