9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (7) TMI 4 - AT - Central ExciseReversal of CENVAT Credit - CERA audit officers directed the assessee to reverse the amount of CENVAT Credit - Solvents, Master-coat, M.S. Bar, Angle, Beam, HR Coils etc. - Held that - Strong force in the contentions raised by assessee that if an assessee has correctly availed the CENVAT Credit and is directed to reverse the same by audit officers on the ground which is not examined by them, it would amount to forcibly directing the appellant to reverse the CENVAT Credit. As apparently the reversal of the amount in the RG23A Part-II register was made without any verification and on the basis of the direction of the officers who conducted the audit. Moreover, the reversal was not a conclusion of any legal process. Subsequently, when the assessee found that they were not eligible for the credit, they have promptly reversed the ineligible portion of the credit on their own. Therefore what has been done by the appellants is basically adjustment of the credit and it has no link to any transaction other than taking credit. Therefore, it is a mere adjustment and squarely covered by the decisions of Lark Wires & Infotech Ltd (2008 (7) TMI 167 - CESTAT AHMEDABAD. In favour of assessee.
Issues:
1. Availment of CENVAT Credit on capital goods. 2. Reversal and re-credit of CENVAT Credit. 3. Adjudication of show cause notice. 4. Applicability of legal provisions and precedents. Issue 1: Availment of CENVAT Credit on capital goods The appellant availed 50% CENVAT Credit on capital goods in 2008-2009 and the remaining 50% in 2009-2010. The CENVAT Credit on capital goods was reversed and re-credited following a CERA audit. The show cause notice proposed recovery of Central Excise duty, interest, and penalty. The Assistant Commissioner initially dropped the proceedings, but the first appellate authority reversed this decision and confirmed the demand. Issue 2: Reversal and re-credit of CENVAT Credit The appellant argued that the goods for which credit was availed were used in manufacturing vessels, which are considered capital goods. They initially reversed the credit as directed by the audit party but re-availed it later, claiming the goods were correctly classifiable as inputs. The Tribunal's decisions in similar cases were cited to support the appellant's position. Issue 3: Adjudication of show cause notice The first appellate authority reversed the initial decision and upheld the demand raised on the appellant. The Department relied on a Larger Bench decision regarding refund of excess/twice paid duty, emphasizing the need for proper refund claim procedures through designated officers. Issue 4: Applicability of legal provisions and precedents The Tribunal found that the appellant correctly availed the CENVAT Credit on goods used in manufacturing vessels for dye intermediates. The reversal and re-credit were deemed necessary based on the nature of the goods and their utilization in the manufacturing process. The Tribunal's decision in a similar case was considered directly applicable, leading to the setting aside of the impugned order and granting relief to the appellant. This judgment highlights the importance of correctly availing CENVAT Credit, the implications of reversing and re-crediting such credit, the adjudication process of show cause notices, and the significance of legal provisions and precedents in determining the outcome of tax disputes. The Tribunal's thorough analysis and application of relevant case law demonstrate a meticulous approach to resolving complex issues related to indirect taxation.
|
