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CESTAT upholds Excise Duty Demand against Cadbury [Read Order]

Cadbury - Excise Duty - Taxscan

In the case of Commissioner of Central Excise, Pune vs. M/s Cadbury India Ltd., the Custom, Excise & Service Tax Appellate Tribunal (CESTAT) held that milk crumb is marketable and hence Cadbury is liable to pay excise duty.

The case was that the respondent namely M/s Cadbury India Ltd. engaged in the manufacturing of cocoa preparations, sugar confectionery, etc. These are those goods which are covered under the ambit of excisable goods under the Central Excise Tariff Act(CETA), 1985. During the visit by the Anti Evasion Staff of Pune-I Commissionerate, it was noticed that the respondent company is manufacturing excisable goods such as Milk Crumb and is chargeable @16% of the Central Excisable Duty. Further, the Milk Crumb which has been produced since 2006 without even paying the excise duty which is the contravention of the rules elaborated in the Central Excise Rules, 2002. Moreover, pertaining to this matter 2 show-cause notices were issued.

The issue raised in this case was whether the milk crumb is an excisable good or not and is the Cadbury liable to pay excise duty or not?

The Custom, Excise & Service Tax Appellate Tribunal (CESTAT) bench comprising of Judicial Member Dr. D.M. Mishra and Technical Member Sanjiv Srivastav held that if in case the issue would have been revenue-neutral, the respondent could have paid the duty and grabbed the credit if it was admissible in the eye of law. Further, the revenue neutrality can never be the ground for not demanding the duty on all those goods which are covered under the ambit of excisable goods in any form or in any manner cleared by an assessee. Thus in the light of this reasoning Custom, Excise & Service Tax Appellate Tribunal (CESTAT) held that milk crumb is marketable and hence Cadbury is liable to pay excise duty as it is covered under the excisable goods.

To Read the full text of the Order CLICK HERE
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