#Excise Duty

The Supreme Court ruled that unpaid excise duty on sugar stock lying in a bonded warehouse cannot be added to taxable income under Sections 43B and 145A where the assessee follows the exclusive accounting method, has not claimed any deduction for such duty, and the goods remain unremoved. The decision clarifies that no tax liability crystallises under excise law until goods are actually cleared from the bonded warehouse, protecting manufacturers from phantom income additions on stock they cannot legally sell.

CESTAT Kolkata holds that Education Cess and SHE Cess credits cannot be transferred to the CENVAT credit account for excise duty payment, reinforcing strict segregation under CENVAT Credit Rules 2004. The Tribunal upheld the demand but waived interest and penalty, emphasizing compliance with Delhi HC precedent.

CESTAT Hyderabad has ruled that CENVAT credit can be availed on duty-paid capital goods used in manufacturing, even when those goods are owned by a third party under lease and permanently installed in the factory. This clarifies that ownership, not usage or immovability, is not a barrier to credit - a critical win for manufacturers relying on leased infrastructure.

CESTAT Chennai rules that job-worked goods consumed by the principal manufacturer are exempt from Rule 8 of the Central Excise Valuation Rules, which mandates 110% cost-based valuation. The tribunal affirms valuation based solely on material and conversion costs, providing relief to job workers and principal manufacturers from additional duty liabilities.

CESTAT Mumbai rules that type test charges paid by customers for transformer certification are distinct service fees, not part of the goods' transaction value for excise duty. This clarifies the boundary between taxable goods and separable services, impacting manufacturers who outsource compliance testing and rely on CENVAT credit claims.

CESTAT Hyderabad ruled that excise duty valuation under Rule 7 must be based on the actual transaction value, rejecting the Department's demand predicated on the highest price of the week. The Tribunal emphasized the one-to-one correlation between factory clearance and depot sales, invalidating arbitrary valuation methods that disregard contractual agreements.

CESTAT Chennai rules that sorting, crushing, and washing waste PET bottles into flakes does not qualify as 'manufacture' under the Central Excise Act, exempting such recycling units from excise duty. The ruling clarifies the legal threshold for 'manufacture' in waste processing, impacting PET recycling businesses and excise compliance.

CESTAT Ahmedabad rules that manufacturers must include freight and insurance charges collected for door delivery in the assessable value under the Central Excise Act, 1944. This overturns claims of exclusion and impacts excise duty calculations for businesses offering door delivery services.

CESTAT Chennai rules that job workers can avail Cenvat credit on capital goods invoiced to principals if the goods are received and used in manufacturing, even if not directly purchased. This overturns demands based on technical ownership, clarifying eligibility under Rule 2(k) of Cenvat Credit Rules for contract manufacturers and job work arrangements.

CESTAT Chennai rules that tyres secured with plastic straps do not qualify as 'pre-packaged commodities' under the Legal Metrology Act, 2009, exempting them from valuation under Section 4A of the Central Excise Act. The ruling quashes a ₹221 crore demand, interest, and penalty, setting a precedent for similar valuation disputes in the tyre industry.

CESTAT Chandigarh rules that CENVAT credit is allowable on waste disposal and air pollution survey services as 'input services' under Rule 2(l) of the CENVAT Credit Rules, 2004, if they are integral to the manufacturing process. This decision clarifies the eligibility of environmental compliance services for tax credit, impacting manufacturers availing such services.

Calcutta High Court ruled that excise duty levied on production capacity under Section 3A of the Central Excise Act need not align with actual output, provided the mechanism serves the legislative intent to prevent tax evasion. The judgment validates the use of 'deeming fiction' in taxation, impacting manufacturers of notified goods like chewing tobacco.

The Tribunal holds that Cenvat credit on supplementary invoices is valid where no suppression is proven, clarifying Rule 9(1)(b) applicability in GST excise matters.

CESTAT Chennai holds that SSI exemption cannot be denied merely because a manufacturer uses a brand name owned by its director or proprietor, absent proof of connection in trade.