Case Law Details

Case Name : Bajaj Auto Ltd. Vs. Commissioner of Central Excise
Appeal Number :
Date of Judgement/Order :
Related Assessment Year :

Facts:- Appellant is engaged in the manufacture of motorcycle, auto rickshaw, etc. and are availing Cenvat credit on the inputs received in its factory. The inputs are supplied by various independent suppliers under contracts backed by the purchase orders for agreed prices. Appellant availed credit on these inputs based on proper duty paying documents.

However, subsequent to the supplies, there was a retrospective reduction in the prices of such inputs. Revenue therefore sought to deny the credit proportionate to the subsequent extinction in prices of inputs. On adjudication, the adjudicating authority confirmed the aforesaid denial of credit along with applicable interest and penalty. Aggrieved with the said order, appellant filed an appeal before the Tribunal.

Held:-The Tribunal held that a manufacturer is eligible for credit of the ‘duty paid’ on inputs and not “duty payable’. The Tribunal further held that there is no provision in excise laws for the re-assessment of the duty paid on inputs at the recipient’s end. It is obligatory on the revenue to re-assess the duty at supplier’s end in order to recover differential duty therefrom rather than denying credit to the input recipient. Therefore it was held that the credit has been correctly availed and the appellant is not required to reverse any part thereof (proportionate to the extinction in price).

Authority:- Bajaj Auto Ltd. Vs. Commissioner of Central Excise – 2009 TIOL 1735

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  1. jileesh says:

    what will happen if reduction in price is made by a credit note issued by the supplier clearly mentioning the reversal of cenvat credit?

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September 2021