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TMI Blog2024 (12) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... duty paid on inputs in terms of Rule 3 of Cenvat Credit Rules, 2004 or not? - HELD THAT:- Admittedly, the appellant has paid duty on the invoices issued by the sender unit of 115% / 110% of the cost of production in terms of Rule 8 of Valuation Rules, therefore, the appellant is entitled to take cenvat credit of what duty they have paid. The said issue has been examined by the Hon ble Punjab Haryana High Court in the case of VG. STEEL INDUSTRY VERSUS CCE [ 2011 (5) TMI 154 - PUNJAB AND HARYANA HIGH COURT] , wherein the Hon ble High Court has observed 'even if the duty has been paid in excess of the amount finally held to be payable, unless the excess duty paid has been refunded, the assessee could claim cenvat credit as the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransaction value for such stock transfer, in terms of Rule 8 of Valuation Rules, 2000 read with CBEC Circular dated 13.02.2003 (CAS-4) w.e.f. 01.07.2000 for the prior period, therefore, the appellant was considering assessable value of cost of production plus actual profit. But the sender units were debiting only cost of material for inter unit transfer of goods to ascertain the viability/profitability of each of such units. For arriving at the cost of goods stock transferred from one unit to another, M/s. Hindustan Lever Ltd. (HUL) consider only cost of raw materials, labour, power, water and other activities (termed as services) and incidence of duty suffered on the goods and do not include the element of overheads or profit, but the valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduction was to be arrived at based on CAS-4 guidelines, as clarified by CBEC, vide Circular dated 13.02.2003, in support of which reliance is placed on the following judgements: i) Cadbury India Ltd. 2006 (200) ELT 353 (SC) ii) Lohia Starlinger Ltd. 2017 (357) ELT 344 (T) iii) Eicher Tractors 2017 (358) ELT 375 (T) iv) Essar Steel India Ltd. 2017 (345) ELT 139 (T) v) Swaraj Foundry Division 2012 (284) ELT 689 (T) 4. He further submitted that the credit of actual duty paid by the sender units is admissible to the appellants and there should not have been any question of doubting the correctness of the assessable value determined by the sender units. He further submitted that duty paid by sender units was proper and legal and whatever duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether appellant is entitled to take Cenvat credit of duty paid on inputs in terms of Rule 3 of Cenvat Credit Rules, 2004 or not ? 10. The facts of the case which are not in dispute that the appellant procuring the input from the sister unit on stock transfer basis and at the time of stock transfer although it is not a sale, the sender unit is paying duty in terms of Rule 8 of Valuation Rules by adopting the formula 115% / 110% of the cost of production and paying duty thereon. The payment of duty by sender unit has been accepted by the Revenue not in dispute and the appellant is taking cenvat credit of duty paid by sender unit on procurement of inputs. But the dispute arises as the sender unit has debited only the cost of production and no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CCE v. Swaraj Automotives Ltd., 2002 (139) E.L.T. 504 and judgment of Madras High Court in CCE v. CEGAT, Chennai, 2006 (202) E.L.T. 753 the plea of the assessee was upheld. Learned counsel for the respondent is unable to distinguish the applicability of the judgment relied upon on behalf of the appellant. 12. Further in the case of Purity Flexpack Ltd. (supra), the Hon ble Gujarat High Court has held as under : [ Order (Oral) ]. - The following question has been proposed for the admission of this appeal :- Whether or not respondent is entitled for CENVAT credit at the higher rate paid on inputs, for which manufacturer of inputs on his own paid duty at the rate of 24% instead of 16%.? 2 . While considering the issue as to what extent CENVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for the purpose of CENVAT credit. The appeal stands dismissed. Following the above decisions, we are of the considered view that the appellant is entitled to take the Cenvat credit of duty paid by them. 13. Therefore, we hold that the appellant has correctly taken the cenvat credit as higher duty paid by the supplier which has not been challenged by the Revenue and not the higher duty paid has been refunded to the sender unit. 14. In that circumstances, we hold that the Cenvat credit of duty paid on procurement of inputs is admissible and cannot be asked to reverse. In these circumstances, no penalty can be imposed on the appellants. 15. In view of this, we set aside the impugned orders and allow the appeals filed by the appellants. Cros ..... X X X X Extracts X X X X X X X X Extracts X X X X
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