Case Law Details
Alfa Laval (India) Limited Vs Commissioner of Central Excise (CESTAT Mumbai)
CESTAT Mumbai held that demand to be unsustainable as even though belatedly the appellant has availed option provided under rule 6 and reversed the relevant cenvat credit along with interest. Concluded that even post-clearance compliance of stipulations precluded denial of an entitlement available otherwise.
Facts- The appellant is a manufacturer of ‘equipment for heating, cooling and separation’ and, having procured certain ‘taxable services’ during 2011-12, proceeded to take credit of tax in the invoices as permissible under rule 3 of CENVAT Credit Rules, 2004. Trading volumes for the period was reported as Rs. 2,32,21,99,414 and the impugned recovery of 5% thereof, as provided in rule 6(3) of CENVAT Credit Rules, 2004 of is cause of dispute herein.
Conclusion- Held that even post-clearance compliance of stipulations precluded denial of an entitlement available otherwise.
In these circumstances, the demand based on the harshest of the options as ordered by the original authority does not sustain. However, in having taken that extreme step, the claim of the appellant that obligation contemplated in the scheme has been duly complied with was not ascertained. The discharge of the obligation must be in consonance with the computation envisaged in rule 6 of CENVAT Credit Rules, 2004. To enable such ascertainment, we set aside the impugned order and remand the matter back to the original authority who shall limit proceedings under rule 14 and rule 15 of CENVAT Credit Rules, 2004, if any, only to deficit, if any, in compliance as set out supra.
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