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2016 (8) TMI 667 - HC - Central ExciseCenvat credit - availed irregularly - assessee replied that it had availed the Cenvat Credit correctly and the Head office had issued ATDs (Advise of Transfer) for transferring of central excise duty paid on inputs and capital goods rather centralized at CTSD and that inputs and capital goods are transferred to them by their Head Office under the ATDS - Held that - the assessee fall in the same Jaipur Circle where their Head Office transferred the ATDs on the capital goods transferred to them. The Tribunal, taking into consideration the fact that transfer of goods from one place to another is a case of transfer of goods from one place to another unit and therefore, the credit taken on the basis of the bill of entry endorsed by the Head officer was valid document u/R.3 and 9 of the Cenvat Credit Rules, 2004 cannot be faulted. - Decided against the Revenue
Issues:
1. Admissibility of Cenvat Credit amounting to Rs. 13,59,408. 2. Competence of the Commissioner to impose penalty. 3. Validity of documents for availing Cenvat Credit. 4. Reversal of order by the Commissioner. 5. Decision of the Tribunal in upholding the order of the adjudicating authority. 6. Interpretation of Cenvat Credit Rules. Analysis: 1. The appeal under Sec. 35G of the Central Excise Act, 1944 challenged the Customs, Excise & Service Tax Appellate Tribunal's order regarding the admissibility of Cenvat Credit amounting to Rs. 13,59,408. The Additional Commissioner initially dropped the demand, but the Commissioner later disagreed, alleging improper availing of the credit based on non-prescribed documents. The Tribunal eventually upheld the adjudicating authority's decision. 2. The Commissioner's competence to impose a penalty under Rule 15 was questioned. The Commissioner found the Cenvat Credit wrongly availed and issued a show cause notice for recovery. The Commissioner reversed the adjudicating authority's decision, concluding that the credit was improperly claimed based on advisory notes from the Head Office. 3. The validity of documents for availing Cenvat Credit was a crucial issue. The Commissioner held that the credit was wrongly availed on capital goods using improper documents, contrary to Cenvat Credit Rules. The Tribunal, however, considered the transfer of goods within the same circle as valid, based on the bill of entry endorsed by the Head Office. 4. The Commissioner's reversal of the adjudicating authority's decision was based on the improper availing of Cenvat Credit. The appellant argued that the credit was irregular and not in accordance with the law. However, the Tribunal found in favor of the adjudicating authority, emphasizing the validity of the internal notes from the assessee. 5. The Tribunal's decision to uphold the adjudicating authority's order was challenged. The appellant contended that the Tribunal erred in allowing the credit based on internal notes that were not within the framework of claiming Cenvat Credit. However, the High Court found no substantial question of law arising from the Tribunal's order. 6. The interpretation of the Cenvat Credit Rules was crucial. The High Court noted that the issue was settled in favor of the assessee based on previous case law. The Court emphasized that the capital goods were duly utilized for taxable output services, supporting the validity of the credit claim. Ultimately, the appeal was dismissed for lacking merit.
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