2013 (7) TMI 404 - AT - Central Excise

Denial of credit - Goods received on stock transfer basis - Revenue denied credit on the basis that it was stock transfer and not sale - Held that - applicant received duty paid raw material on stock transfer basis - credit is available in respect of duty paid on inputs received on stock transfer basis - Following decision of Exide Industries Ltd. vs. Commissioner of C.EX. Haldia 2008 (1) TMI 190 - CESTAT, KOLKATA and Shivagrico Implements Ltd. vs. Commissioner of C. EX 2008 (2) TMI 369 - RAJASTHAN HIGH COURT - Decided against Revenue.

Summary

Issues:
Appeal against Commissioner's order denying cenvat credit on duty paid on inputs received on stock transfer basis.

Analysis:
The appeal was filed by the Revenue against the Commissioner's order dated 31/07/2006, which denied cenvat credit to the Respondent for duty paid on inputs received from their sister concern on stock transfer basis. The Revenue contended that since the raw material was not purchased, the Respondent was not entitled to the credit as per provisions of Central Excise Rules, 1994.

The Respondent argued that the issue had been settled by previous decisions, citing the case of Exide Industries Ltd. vs. Commissioner of C.EX. Haldia and the decision of the Hon'ble High Court of Rajasthan in the case of Shivagrico Implements Ltd. vs. Commissioner of C. EX., Jaipur. They maintained that credit is available for duty paid on inputs received on stock transfer basis.

The Tribunal, in its judgment, noted that the applicant had indeed received duty paid raw material on stock transfer basis. The main objection raised by the Revenue was that the transaction did not constitute a sale. However, the Tribunal found that this issue had already been settled by previous decisions referred to by the Respondent, where it was held that credit is indeed available for duty paid on inputs received on stock transfer basis.

Consequently, the Tribunal found no merit in the appeal and dismissed the same. The judgment was delivered by Mr. S.S. Kang, with no separate judgments by any other judge mentioned in the summary.