9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (12) TMI 1151 - AT - Central ExciseDuty demand - revenue neutrality - duty is available to sister unit as cenvat credit - Whether dropping of demand of duty in respect of certain items such as Printer, PC Workstation, Modem, Cable Line, ISDN Telephone, Terminal Adapter, which were bought to the premises of the unit valued at ₹ 21,19,90,054/- and cleared without payment of Central Excise duty amounting to ₹ 3,43,67,490.00 during the period from 1st April 1998 to 31st May, 2000 1st April 1998 to 31st May, 2000 1st April 1998 to 31st May, 2000, under the cover of non-excisable invoices, was proper - Held that - Revenue had not disputed findings of the Adjudicating authority on revenue neutrality. The Hon ble Gujarat High Court in the case of CCE, Vadodara-II Vs Indeos ABS Ltd - 2010 (3) TMI 656 - GUJARAT HIGH COURT dismissed the Revenue s appeal, holding that since the goods were cleared to sister concern whatever duty payable and availed as credit to their own unit hence entire exercise would be revenue neutrality. It has further been observed that the Revenue s grievance is acceptable, if the ultimate exercise benefited the Revenue by collection of duty and in that case, no such benefit accrues to exchequer. The said decision was upheld by the Hon ble Supreme Court as reported in 2011 (3) TMI 1575 - SUPREME COURT . In the present case, we find that if the Respondents avail CENVAT Credit, demand of duty would not be sustainable. - No reason to interefere with impugned order - Decided against Revenue.
Issues:
- Appeal against dropping of duty demand on certain items - Revenue neutrality and CENVAT credit eligibility Analysis: 1. The appeals arose from the Commissioner, Central Excise dropping proceedings initiated under four show cause notices. The Revenue challenged the order regarding the clearance of goods without payment of duty under non-excisable invoices. 2. The issues involved in the show cause notices were related to the clearance of software loaded in Digital Switching Systems, non-manufactured parts, and bought out items without payment of Central Excise duty. The Revenue specifically appealed against the dropping of duty demand on items like Printers, PC Workstations, Modems, etc., valued at a significant amount during a specific period. 3. The Revenue argued that the bought out items received by the Respondent were essential parts of the finished goods, emphasizing their integral nature. However, the Respondent contested the duty demand, highlighting that they did not avail CENVAT Credit on the bought out items and that the value of these items was not included in the assessable value. 4. The Adjudicating authority's findings indicated that the bought out items were accessories providing additional features to the manufactured equipment. The authority noted that the manufacturer had the option to claim MODVAT Credit on accessories or not, based on which duty payment was determined. The authority found that the manufacturer did not undertake processing on the bought out items and thus was not required to pay excise duty on their clearance. 5. Referring to a similar case involving telephone exchange equipment manufacturers, the Tribunal's judgment highlighted that the value of bought out items should not be included in the value of manufactured items. The Tribunal's decision was supported by the Supreme Court, emphasizing that the duty liability ends upon clearance of manufactured goods. 6. The discussion also referenced a case where the Gujarat High Court dismissed an appeal by the Revenue, emphasizing revenue neutrality when goods are cleared to a sister concern. The High Court's decision was upheld by the Supreme Court, indicating that if the Respondents availed CENVAT Credit, the demand of duty would not be sustainable. 7. Ultimately, the Tribunal found no reason to interfere with the impugned order and dismissed all appeals filed by the Revenue, considering the aspects of revenue neutrality, CENVAT Credit eligibility, and the legal position regarding the inclusion of bought out items in the assessable value.
|
