9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 335 - AT - Central ExciseAvailment of CENVAT Credit - supplementary invoices - contravention of the provisions of Rule 9(b) of CENVAT Credit Rules, 2004 - Held that - Appellant availed CENVAT Credit of ₹ 10,36,468.00 on the basis of supplementary invoices issued by their sister unit at Mumbai. Commissioner of Central Excise, Mumbai has passed an order dt.25.11.2005 to their sister unit at Mumbai demanding differential duty of ₹ 10,36,468.00 as the Mumbai unit failed to correctly determine the assessable value in respect of the goods declared to their sister unit (i.e. the Appellant herein). It was observed that since mis-declaration of the amount was admitted by the Mumbai unit, the extended period of limitation would be invoked. But, Mumbai unit paid duty and issued supplementary invoice to the sister unit - Department has not disputed the transaction between the Appellant and its sister unit. It is noted that the differential duty was paid for price of escalation, which was paid by sister unit. Hence, the decision of Hon ble Karnataka High Court in the case of Karnataka Soaps & Detergents Ltd (2010 (2) TMI 524 - KARNATAKA HIGH COURT) would be applicable in the present case. As the decision of Hon ble High Court is directly on the issue, the decision of Mumbai Tribunal as relied upon by the learned Authorised Representative is not applicable. - CENVAT Credit taken by the Appellant on the strength of supplementary invoice issued by their sister unit cannot be denied and demand of duty alongwith interest and penalty cannot be sustained - Decided in favour of assessee.
Issues:
1. Disallowance of CENVAT Credit on the basis of supplementary invoices. 2. Interpretation of Rule 9(b) of CENVAT Credit Rules, 2004. 3. Determination of stock transfer versus sale in inter unit transactions. 4. Applicability of precedents in similar cases. Analysis: Issue 1: Disallowance of CENVAT Credit on the basis of supplementary invoices The case involved the appellants availing CENVAT Credit based on supplementary invoices issued by their sister unit for the payment of differential duty. The Adjudicating Authority disallowed the credit, leading to a Show Cause Notice proposing the disallowance along with interest and penalty. The Commissioner (Appeals) upheld the decision, resulting in the appeal. Issue 2: Interpretation of Rule 9(b) of CENVAT Credit Rules, 2004 The Advocate for the Appellant argued that Rule 9(b) could not be invoked as it was a case of stock transfer, not a sale. The Advocate relied on a decision by the Karnataka High Court to support this argument. However, the Authorised Representative for the Revenue contended that the goods were sold to the Appellant by the sister unit, citing a Tribunal decision where the appeal of the Revenue was allowed due to suppression of facts in issuing supplementary invoices. Issue 3: Determination of stock transfer versus sale in inter unit transactions After reviewing the records, the judge found that the Appellant received goods from their sister unit, and there was no dispute regarding this fact. The Advocate argued that in cases of inter unit stock transfer within the same Company, there cannot be a sale. Referring to the Karnataka High Court decision, it was highlighted that the credit availed on the basis of supplementary invoices for internal stock transfers should not be disallowed if there was no sale involved. Issue 4: Applicability of precedents in similar cases The judge concluded that the Department did not contest the transaction between the Appellant and its sister unit. It was noted that the differential duty was paid for price escalation, indicating a stock transfer scenario. Therefore, the decision of the Karnataka High Court was deemed applicable, and the Tribunal decision cited by the Revenue was considered irrelevant. Consequently, the CENVAT Credit taken by the Appellant was allowed, and the demand of duty, interest, and penalty was set aside. In summary, the judgment revolved around the disallowance of CENVAT Credit based on supplementary invoices, the interpretation of Rule 9(b) of CENVAT Credit Rules, the distinction between stock transfer and sale in inter unit transactions, and the application of relevant legal precedents to determine the outcome of the case.
|
