CENVAT Credit eligible on Product Recall Policy expenses
In Bhavani Industries v. CCE & ST, Rajkot [Excise Appeal No. 10416 of 2019 dated September 21, 2021], Bhavani Industries (“the Appellant”) filed an appeal impugning Order No. OIA-RAJ-EXCUS-000-APP-023-2018-19 dated April 18, 2018 passed by Commissioner (Appeals) Commissioner of Central Excise, Customs and Service Tax, Rajkot (“the Respondent”).
The Appellant counsel relied on an erstwhile judgement [M/s. Bhavani Industries V/s. C.C.E. & S.T. Rajkot 2018 (10) TMI 626 CESTAT Ahmedabad] wherein the matter was adjudged in the favor of the Appellant.
The Respondent, as opposed to the contentions raised by the Appellant, reiterated the findings of the impugned order; wherein it was held that the expenses towards product recall policy expenses are not eligible for CENVAT credit.
After taking perusal of all the facts and evidences, the Customs, Excise and Service Tax Appellate Tribunal (“CESTAT”), Ahmedabad held that the Product Recall Policy expenses is born for the purpose of security of the goods and for this reason the service falls under the definition of input services and is therefore, eligible for CENVAT Credit.
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