CESTAT Upholds Deductions on Post‑manufacturing Expenses, Strikes Down ₹6.34 lakh Excise Duty Demand Against Dabur India [Read Order]
The ruling reinforces that PME deductions on a weighted average basis remain permissible under excise law, and attempts to reopen settled issues without new grounds cannot stand.
In a recent ruling, the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chandigarh, struck down an excise duty demand of ₹6.34 lakh along with interest and penalty against Dabur India, holding that deductions on post‑manufacturing expenses (PME) such as octroi, sales tax, and transportation costs on a weighted average basis are valid.
The appellant, Dabur India Ltd, a multi-product manufacturer registered under the Central Excise, had claimed PME deductions for the period January 2007 to September 2008. The department issued multiple show cause notices (SCNs), alleging that such deductions were inadmissible under Section 4 of the CentralExcise Act and CBEC Circular.
While earlier adjudication orders went against Dabur, the Commissioner (Appeals) had allowed their claims.
The appeal arose after the Commissioner (Appeals), CGST, Chandigarh, confirmed a demand of ₹6,34,589 excise duty under Section 11A of the Central Excise Act, 1944, along with interest and equal penalty under Rule 25 of the Central Excise Rules, 2002, read with Section 11AC.
The counsel for the appellant submitted that the Appellant was issued multiple SCNs. Also, the Tribunal has rejected the appeals of the department and decided the issue in favour of the Appellant in Final Order dated 30.04.2009, Chandigarh vs. M/s Dabur India Ltd – 2009 .
The appellant counsel also relied on CBEC Circular No. 20/90-CX.1 , which clarified that such deductions could be made on an equalised/weighted average basis, and cited supportive rulings in Fresenius Kabi Oncology Ltd (2023), Becton Dickinson India Pvt Ltd (2024), Hindustan Unilever Ltd (2016, Cochin & Pondicherry).
On the other hand, the counsel for the revenue reiterates the findings of the impugned order.
After considering the submissions, the bench comprising Justice S.S. Garg (Judicial Member) and P. Anjani Kumar (Technical Member) observed that “we find that the issue involved in the present case is no more res integra and has been settled by the Tribunal in favour of the Appellant in their own case for the earlier period (cited supra), whereby the Tribunal held that deductions on account of PME like octroi, additional sales etc are admissible to the Appellant on weighted average basis.”
The tribunal noted that since the department had not appealed against the 2009 ruling, it had effectively accepted the position. Following consistent judicial precedents, the Bench held that the impugned order was unsustainable.
Accordingly The Tribunal allowed Dabur India’s appeal with consequential relief.Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
