CE – CENVAT Credit - Maruti Suzuki - partly dissented with - referred to Larger Bench
IN recent times the decision of the Supreme Court Maruti Suzuki Limited Vs. Commissioner of Central Excise – , has been one of the most understood and misunderstood judicial decisions and certainly one of the most cited decisions.
Now the Supreme Court has not agreed with a part of the Maruti judgement and referred the issue to a Larger Bench.
Referring to the Maruti case, the Supreme Court said,
“The effect of the afore-mentioned decision is that in order to fall within the ambit of the term "inputs" within the meaning of Rule 2(g) of the 2002 Rules, the goods must be (i) used in or in relation to the manufacture of the final product, whether directly and indirectly, and whether the said goods are contained in the final product or not, (ii) covered within the six categories of goods enumerated in Rule 2(g) and (iii) used within the factory of production. We are constrained to observe that while the subject goods must qualify the first and third parts of the definition, viz. the specific part and location of use, as enumerated in the said judgment, but to confine the goods only to the inclusive part of the definition that is to the six categories of goods mentioned therein may fall foul of the definition of the word "inputs" in Rule 2(g) of the said Rules. Prima facie, we are of the view that the legislature did not intend to restrict the definition of "inputs" to only those six categories.”
For referring the case to a Larger Bench, the Supreme Court said, “ it appears that by employing the phrase "and includes", legislature did not intend to impart a restricted meaning to the definition of "inputs" and therefore, the interpretation of the said term in Maruti Suzuki Limited (supra), may require reconsideration by a larger bench”.
We bring you this landmark judgement of the Supreme Court today.
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