Case Law Details
The Explanation given by the CBEC vide its Circular No. 643/34/2002-CX dated 1-7-2002 cannot apply in the cases where the transaction value of the concerned goods is available on record; to ignore such value on the record and to take resort to the explanation given by the CBEC would virtually amount to defeat the mandate of Rule 3(4) which will result In giving overriding effect to the explanation of the CBEC over and above and contrary to the provisions in the statutory rule comprised under Rule 3(4) of the Cenvat Credit Rules, 2002.
CASE LAWS DETAILS
DECIDED BY: CESTAT, PRINCIPAL BENCH, NEW DELHI, IN THE CASE OF: National Engg. Ind. Ltd. Vs. CCE, APPEAL NO: EXCISE APPEAL NO. 572 OF 2005, DECIDED ON APRIL 13, 2010
FACTS
In course of verification of audit, it was revealed to the Department that the appellants had availed Cenvat credit on the inputs namely “Grease Seal’ and had subsequently removed the said inputs to their sister unit namely M/s National Engineering Industries, Khatipura Road, Jaipur without issuing any invoice and by merely reversing the credit in RG-23A Pt. II register. As the transaction value of the said inputs was available at the dealer’s premises, which was the sister unit of the appellants, a show cause notice dated 24/11/03 came to be issued to the appellants requiring the appellants to explain as to why the duty to the tune of Rs. 5,25,979/- should not be recovered from them under Section 11A of the Central Excise Act, 1944 read with Rule 3 (4) of the Cenvat Credit Rules, 2002 along with interest chargeable under Section 11AB of the said Act on the duty short paid/not paid and as to why penalty should not be imposed under Rule 13 (1) of the Cenvat Credit Rules, 2002 read with Rule 25 of the Central Excise Rules. The proceedings were contested by the appellants by filing their reply dated 1st March 200^. It was the contention on behalf of the appellants that the inputs were not sold to an independent buyer, but were only removed in the nature of transfer to the sister unit and the value of the said goods clearly revealed from the invoice on the basis of which the credit was sought to be availed by the appellants. Since, the goods were not sold by the appellants, but were merely transferred to the sister concern, the Circular No. 643/34/2002-CX dated 1/7/2002 issued by the Board and particularly with reference to point 14 thereof clearly required the Department to accept the value of the goods, as disclosed in such Invoice. The contention of the appellants did not appeal to the Adjudicating Authority or to the Commissioner (Appeals) and hence the present appeal.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
