9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (2) TMI 266 - AT - Central ExciseBenefit of Cenvat Credit - Captive consumption of electricity - Held that - Appellant company had wheeled out a portion of the electricity to their sister unit viz., Ashoka Spintex for manufacturing of the excisable goods. The Hon ble Supreme Court directed the Adjudicating Authority to calculate and charge duty or reverse credit to the extent the electricity cleared at a price to their sister company. Assessee has shown the amount in their books of accounts for clearance of electricity to the other units. - Adjudicating Authority confirmed the demand of cenvat credit on the basis of the Chartered Engineers certificate dtd 21.12.2009, of the appellants own evidence. In view of the decision of Tribunal in the case of Modern Food Industries Ltd (1988 (7) TMI 190 - CEGAT, NEW DELHI) the transfer of the amount of their sister unit by book adjustment would be treated as amount charged to the other unit. In our considered view, the Adjudicating Authority rightly confirmed the reversal of credit. The case of SRF Ltd (2014 (2) TMI 280 - MADRAS HIGH COURT) relied upon by the Ld Advocate would not be applicable in the present case. In that case, the Hon ble High Court remanded the matter to the Tribunal for factual adjudication. In the present case the Hon ble Supreme Court remanded the matter to the Adjudicating Authority with certain directions on factual basis. So, the order of recovery of Cenvat Credit as held by the Adjudicating Authority is sustainable. - we upheld adjudication order to the extent of recovery of cenvat credit. In so far as, the order of the recovery of interest, the matter is remanded to Adjudicating Authority to decide afresh, after considering the facts and the case laws relied upon by them - Appeal disposed of.
Issues involved:
1. Recovery of Cenvat Credit for electricity supplied to sister unit. 2. Recovery of interest on unutilized Cenvat Credit. Analysis: Issue 1: Recovery of Cenvat Credit for electricity supplied to sister unit: The case involved the appellants availing Cenvat Credit under Cenvat Credit Rule 2002 for using Naphtha in gas turbines to generate electricity. A show cause notice was issued for recovery of Cenvat Credit amounting to Rs. 2,48,59,319/- for electricity supplied to a sister unit. The Adjudicating Authority confirmed the demand, which was set aside by the Tribunal. Following a Supreme Court judgment, the Commissioner directed recovery of Cenvat Credit of Rs. 1,72,21,030/- on Naphtha used for electricity generation wheeled out of the unit. The appellant argued they did not charge any price to the sister unit, hence no credit reversal was required. The Revenue contended that book adjustments constituted payment to the sister unit, citing relevant case law. The Tribunal found that the appellant had indeed wheeled out electricity to the sister unit for manufacturing excisable goods. The Adjudicating Authority based the demand on the appellant's own evidence and a Chartered Engineer's certificate. Referring to a previous Tribunal decision, the Tribunal held that transactions with sister units through book adjustments constituted sales, justifying the credit reversal. The Tribunal upheld the recovery of Cenvat Credit as directed by the Adjudicating Authority. Issue 2: Recovery of interest on unutilized Cenvat Credit: Regarding the demand of interest on unutilized Cenvat Credit, the appellant argued that they had not utilized the credit during the relevant period, citing various case laws. The Revenue contended that credit utilization rendered the appellant liable for interest. The Tribunal acknowledged conflicting decisions on this issue and emphasized the need to examine whether the appellant utilized the credit during the material period. The Tribunal directed the Adjudicating Authority to reevaluate the demand for interest considering the facts and case laws presented. In conclusion, the Tribunal upheld the recovery of Cenvat Credit while remanding the decision on interest recovery back to the Adjudicating Authority for a fresh determination based on credit utilization during the relevant period and relevant legal precedents. The appeal was disposed of accordingly.
|
