2025-VIL-1964-CESTAT-HYD-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise – Activity of importing and re-packing of Peanut Butter, Cenvat credit on CVD - Appellant was engaged in importing and re-packing Peanut Butter. The appellant availed Cenvat credit on CVD paid at the time of import and utilized the same towards duty paid on re-packed Peanut Butter and payment of SAD - The Department held that the goods were unconditionally exempted under Notification No. 03/2006-CE dated 01.03.2006, and therefore the appellant had wrongly taken and utilized the Cenvat credit - Whether Peanut Butter can be considered as "similar edible preparation" to Margarine and therefore excluded from the exemption notification – HELD – earlier in appellant’s own case, the Commissioner (Appeals) has clearly held the impugned goods were similar to Margarine and therefore clearly excluded from the exemption notification. The Department has not challenged this order and therefore, the view of the Commissioner (Appeals) has to be considered as the view of the Department. Therefore, when the Department itself has decided that demand is not sustainable in the given factual matrix, both on grounds of revenue neutrality as well as on account of its being similar edible preparation to Margarine, then now the demand raised on the similar issue cannot sustain to the extent of recovery of credit taken in respect of CVD utilized towards payment of duty on re-labelled Peanut Butter - Even otherwise, both Peanut Butter and Margarine are edible preparations directly fit for human consumption, with similar fat content, origin and usage. The expression “similar edible preparation” has to be interpreted expansively, and Peanut Butter and Margarine are similar edible preparations. Therefore, the demand for recovery of Cenvat credit is not sustainable and set aside. However, the demand of Cenvat Credit where the goods itself has not been utilized for manufacture or for that matter written off in books of accounts, is upheld – The appeal is partly allowed
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