Peanut Butter Classification Dispute: CESTAT Sets Aside ₹135 Cr CENVAT Demand

The CESTAT set aside a ₹135 crore CENVAT credit demand after holding that peanut butter could not be classified as margarine for excise purposes. The Tribunal observed that classification must be based on product composition, usage, and consumer perception. However, it upheld the reversal of credit on inputs that were written off, reaffirming statutory compliance requirements. The ruling offers clarity on product classification disputes and balances taxpayer relief with adherence to CENVAT credit rules.