9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (7) TMI 572 - AT - Central ExciseRecovery of CENVAT Credit alongwith interest and penalty - Wrongful availment of CENVAT credit - invalid documents under Rule 16(1) of Central Excise Rules, 2002 - transformers originally cleared by the appellant on payment of duty and subsequently received back for repairs etc. - to be treated as inputs or not - HELD THAT - The amounts so paid by the Appellant in terms of Rule 16 (2) were undisputedly paid by the appellant at the time of removal of goods from their factory and there is no delay in making the payment from the due date - In the present case there is no delay in payments that were required to be made as per rule 16 (2), and if there was no delay in making the payments of the amount due, the demand for interest cannot be sustained for what so ever reason. Reliance placed in the case of HITESH PLASTIC PVT. LTD. VERSUS COMMISSIONER OF C. EX. CUS., VAPI 2009 (3) TMI 337 - CESTAT, AHMEDABAD where it was held that Admittedly, the goods stand returned in the present case and the appellant would be entitled to the credit, in terms of the said rules. Accordingly, I set aside the impugned order and allow the appeal with consequential relief to the appellants. The view expressed in the decisions also supports the stand of the appellant that they could have followed the procedure as prescribed by Rule 16 (1) on the basis of triplicate copy of their own invoices, the view as expressed by the Commissioner in the impugned order. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Legitimacy of CENVAT credit availed under Rule 16(1) of the Central Excise Rules, 2002. 2. Applicability of interest under Rule 14 of the CENVAT Credit Rules, 2004 read with Section 11AB of the Central Excise Act, 1944. 3. Imposition of penalty under Rule 15(1) of the CENVAT Credit Rules, 2004 read with Rule 25 of the Central Excise Rules, 2002. Detailed Analysis: 1. Legitimacy of CENVAT Credit: The appellant, engaged in the manufacture of transformers, received goods for repair without original duty-paying documents and availed CENVAT credit based on Xerox copies of triplicate invoices. The revenue argued that the appellant should have sought permission under Rule 16(3) of the Central Excise Rules, 2002, as the goods were received without duty-paid documents, making the CENVAT credit availed under Rule 16(1) improper. The Tribunal noted that Rule 16(1) allows manufacturers to take CENVAT credit on goods returned for repair as if they were inputs, provided the goods were initially cleared on payment of duty. The Commissioner confirmed that the triplicate copies of the invoices were in order and correlated with the CENVAT credits taken. The Tribunal held that the appellant was within its rights to avail CENVAT credit under Rule 16(1) based on their own invoices, as there was no allegation that the goods received were not those initially cleared on payment of duty. 2. Applicability of Interest: The revenue demanded interest under Rule 14 of the CENVAT Credit Rules, 2004, read with Section 11AB of the Central Excise Act, 1944, for the period during which the goods were returned and finally cleared after repairs. The Tribunal observed that Rule 16 does not specify a period within which the goods should be removed after repairs. Since the credit was taken legitimately under Rule 16(1) and there was no delay in making the payments as per Rule 16(2), the demand for interest was not justified. The reliance on the SKF India Ltd. case was found misplaced as it pertained to supplementary invoices and delayed payment of duty, which was not the issue here. 3. Imposition of Penalty: The Commissioner did not impose any penalty, stating that there was no misfeasance on the part of the assessee. The Tribunal agreed, noting that the appellant had reversed the CENVAT credit at the time of clearance of the repaired goods, and there was no contravention of the Central Excise Rules, 2002, or the CENVAT Credit Rules, 2004, warranting a penalty. Conclusion: The Tribunal allowed the appeal, setting aside the impugned order. The appellant was found to have legitimately availed CENVAT credit under Rule 16(1) of the Central Excise Rules, 2002, and there was no basis for the demand of interest or imposition of penalty. The Tribunal's decision was based on the proper interpretation of Rule 16 and the facts of the case, confirming that the appellant followed the correct procedure for availing CENVAT credit on returned goods for repair.
|
