Case Law Details
Haver Ibau India Pvt. Ltd. Vs C.C.E. & S.T.-Vadodara-II (CESTAT Ahmedabad)
Rule 3(5B) of Cenvat Credit Rules cannot be invoked if No evidence has been led in by the Revenue to prove that the goods have not been used and rule 14 cannot be invoked to demand reversal of cenvat credit as explanation was added only with effect from 01.03.2013 and the period in question is prior to 2012.
Introduction
In the recent case of Haver Ibau India Pvt. Ltd. vs. C.C.E. & S.T.-Vadodara-II, the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) Ahmedabad issued a significant judgment regarding the application of Rule 3(5B) of the Cenvat Credit Rules. The case revolved around the demand for the reversal of cenvat credit due to certain amounts written off by the vendor. The appellant, Haver Ibau India Pvt. Ltd., had imported capital goods and raw materials and availed credit for the CVD (Countervailing Duty) paid on these imports. However, the foreign principal waived the price payable for these goods, prompting the revenue authorities to issue a show-cause notice for the reversal of credit under Rule 3(5B). CESTAT also explained why Rule 14 cannot be invoked for demanding the reversal of cenvat credit due to the explanation added with effect from 01.03.2013.
Analysis of Rule 3(5B) of the Cenvat Credit Rules
Please become a Premium member. If you are already a Premium member, login here to access the full content.