Case Law Details
Kanade Anand Udyog Pvt Ltd Vs CCE Thane – I (CESTAT Mumbai)
Introduction: The case of Kanade Anand Udyog Pvt Ltd vs. CCE Thane-I (CESTAT Mumbai) revolves around the denial of CENVAT credit for duty discharged on the procurement/import of ‘capital goods’ between 2005-06 and 2007-08. The denial was based on the lack of evidence that these goods had been received at the appellant’s designated factory. This article provides an in-depth analysis of the case and the final verdict.
Background of the Case: Kanade Anand Udyog Pvt Ltd had their CENVAT credit challenged due to a lack of evidence regarding the receipt of ‘capital goods’ at their designated factory. The denial pertained to the period between 2005-06 and 2007-08.
Denial and Appeal: The initial demand was for ₹21,31,950. Still, after the appellant’s explanation that ‘welding machines’ had been disposed of after payment of duty, the demand was reduced by ₹37,061 by the first appellate authority. The appellant provided various justifications, such as the transfer of machinery to sister units and the use of spares and consumables. However, these explanations were rejected by the authorities.
Factory Ceased to Function: The appellant’s pleas were made in the context of their factory ceasing to function by the time of an audit visit in 2008. They explained the absence of goods by mentioning transfers to sister units and the deployment of spares and consumables. The authorities challenged the allegations of non-inclusion in income tax returns.
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