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SUB: CENTRAL EXCISE - PAYMENT OF DUTY ON WASTE PACKAGE / CONTAINERS USED FOR PACKING MODVATABLE INPUTS WHEN CLEARED FROM THE FACTORY OF THE MANUFACTURER AVAILING MODVAT / CENVAT CREDIT – REGARDING..
It is brought to the notice of all concerned that Hon'ble Supreme Court has held in the case of M/s West Coast Industrial Gases Ltd. that no duty could be demanded on the containers used for the packing of inputs, on which credit has been taken, when cleared from the factory of the manufacturer availing credit as these containers could not be treated as scrap or waste arising out of the manufacturing process. Similarly, reversal of credit either on proportionate basis or otherwise is also not required as the utilization of input on which credit has been taken is not in dispute.
2. Accordingly, Board has clarified that no duty shall be payable and no reversal of credit is also warranted on waste package /containers used for packing inputs, on which credit has been taken, when cleared from the factory of the manufacturer availing Modvat/ CENVAT credit.
3. Trade Associations are requested to give wide publicity to the contents of this Trade Notice amongst their members
( RAJENDRA PRAKASH )
COMMISSIONER
Authority : Circular No. 721/37/2003-CX Dated 6.6.2003.