- within Technology and Tax topic(s)
The issue before the Hon'ble Bench of the Customs, Excise & Service Tax Appellate Tribunal ('CESTAT') at Hyderabad was regarding eligibility of credit of CVD paid on import of Peanut Butter which was utilised towards excise duty paid on re-packed Peanut Butter falling under chapter 1517 90.
It was the case of the department that the goods were unconditionally exempted in terms of Entry at Sl. No.11 of Notification No.03/2006-CE dated 01.03.2006 which reads as 'All goods under 1517 90 or 1518 (other than margarine and similar edible preparations)'. Thus, it was contended that credit was not eligible on such exempted goods.
It was argued that in terms of General Rule for Interpretation and Explanatory Note I to HSN, 'Peanut Butter' and 'Margarine' covered under Chapter Heading 1517 are comparable goods. Thus, 'peanut butter' being 'similar edible preparation like Margarine' is not exempt under Sl. No.11 of Notification No.03/2006-CE dated 01.03.2006 and thus, were eligible to avail credit.
Upon considering the above arguments, the Hon'ble CESTAT held the expression 'similar' used in Sl. No.11 of Notification No.03/2006-CE dated 01.03.2006 cannot be given a restrictive meaning. That Margarine and Peanut Butter are edible preparations, which are directly fit for human consumption and even in terms of fat content, origin and usage etc. they are 'similar edible preparations'. Further, it was held that the department could not rely on the decision of Hon'ble Kerela High Court in the assessee's own case where it was claimed that 'peanut butter' is not akin to 'margarine or butter' insofar as the said decision was in the context of definition provided under Food Safety and Standards Regulation, 2016, while the present case pertained to determination of exemption under Notification No.03/2006-CE dated 01.03.2006.
Represented by: Mr. Narendra S Dave (Advocate) along with Mr. Chanda Sumanth and Anushka Rastogi (Advocates) from Lakshmikumaran and Sridharan Attorneys represented the Assessees before the Hon'ble CESTAT.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
