CENVAT Credit Rules, 2002

Ramala Sahkari Chini Mills Ltd., a sugar manufacturer, claimed CENVAT credit on welding electrodes used for maintenance of its plant. The Excise authorities disallowed the credit, imposed a penalty and the Tribunal upheld the disallowance, relying on earlier decisions that welding electrodes are not inputs. The appella…

The appellants, both small‑scale industrial units, manufactured their own branded medicines and also performed job‑work for third parties, producing goods bearing the third parties' brand names. While they paid excise duty on the third‑party branded goods, they also claimed MODVAT/CENVAT credit on the inputs used. The …

Vikram Cement, a cement manufacturer, claimed CENVAT credit for duty paid on inputs (explosives, lubricating oil, welding electrodes) and capital goods (limestone crusher, mining equipment) used in its captive limestone mines adjacent to its factory. The department issued show‑cause notices rejecting the credit, arguin…

The Union of India had granted a ten‑year exemption from excise duty for certain goods, including pan masala and tobacco products, through a 2003 notification. In 2007 it issued a new notification withdrawing that exemption on the ground that the products were hazardous to health. Manufacturers such as Unicorn Industri…

The Commissioner of Central Excise appealed against Gujarat Narmada Valley Fertilizers Ltd. for disallowing CENVAT credit on Low Sulphur Heavy Stock (LSHS) used as fuel in producing steam and electricity that was employed in the manufacture of exempted fertilizers. The key question was whether Rule 6(1) of the CENVAT C…

Mis. Maruti Suzuki Ltd., a motor‑vehicle manufacturer, generated electricity in its plant using naphtha and diesel and sold a portion of the surplus to its joint ventures, vendors and the grid for a price. The company claimed CENVAT credit on the duty paid on the fuel used for electricity generation, arguing that elect…

The appellant, Commissioner of Central Excise, challenged the assessee Gujarat Narmada Valley Fertilizers Ltd.’s claim of Cenvat credit on duty‑paid Low Sulphur Heavy Stock (LSHS) used as fuel to generate steam and electricity for producing fertilizer, a product exempt from excise duty. The Tribunal’s larger bench had …

Bombay Dyeing & Manufacturing Co. operated a composite mill where yarn was spun and grey fabrics were woven but not further processed. Under Notification No. 14/2002‑CE, such grey fabrics are exempt from excise duty (nil rate) provided (i) duty on the yarn input is paid before claiming the exemption and (ii) no CENVAT …

The Union of India appealed against Hindustan Zinc Ltd. challenging the company's claim of Modvat/Cenvat credit on inputs used to produce sulphuric acid and other chemicals that were cleared to fertilizer plants at nil duty. The issue was whether Rule 57CC of the Central Excise Rules, which mandates separate accounting…

MIS Sports & Leisure Apparel Ltd, a manufacturer of knitted garments, purchased excise‑duty‑paid yarn but did not claim MODVAT credit and produced fabrics wholly consumed in garment production. Under the 2002 Union Budget, Notification Nos. 14/2002‑CE and 15/2002‑CE offered two schemes: a concessional duty rate for tho…