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2024 (4) TMI 899 - AT - Central ExciseShort payment of Central excise duty - reversal of irregular credit - revenue neutrality - difference in book stock and physical stock - Proof of replacement of goods - Extended period of Limitation. Short payment of duty - stock transfer of goods to their sister concern - HELD THAT:- Demand has been raised on the appellant holding that certain elements of cost have not been added while ascertaining the assessable value. It is observed that the department has not adduced any evidence to the effect that which cost was not included and why such cost is to be included. In the absence of any specific cost not added in the assessable value by the appellant, we observe that the allegation of the department is not substantiated. Revenue Neutrality - HELD THAT:- The entire exercise is revenue neutral and thus the demand is liable to be set aside on this ground alone - reliance placed on the decision of this Tribunal in the case of M/S. HINDALCO INDUSTRIES LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, BHUBANESWAR-II [2023 (5) TMI 720 - CESTAT KOLKATA] wherein on similar facts, this Tribunal has held that when the entire exercise is revenue neutral, the demand is not sustainable as the duty paid will be available as credit for their sister unit and there is no loss of revenue to the exchequer. The demand confirmed in the impugned order on this count is not sustainable and accordingly, the same is set aside. Short payment of duty on the goods sent free of cost to customers - HELD THAT:- The appellant has adopted the valuation method of 110% of the cost, to pay duty on the free supplies to customers - it is observed that when similar goods are not sold by the appellant, the valuation adopted by the Appellant is valid and thus we hold that there is no short payment of tax. Accordingly, the demand confirmed in the impugned order on this count is not sustainable and hence the same is set aside. Denial of CENVAT Credit taken on the goods rejected by the customers and returned to the supplier and subsequently replaced - HELD THAT:- When the goods are purchased as inputs but are later returned for being defective and are replaced by the supplier, credit cannot be denied to the supplier. In support of this contention reliance placed on the decision of the Tribunal in the case of ERICSSON INDIA PVT. LTD. VERSUS COMMISSIONER OF C. EX. & S.T., JAIPUR [2014 (10) TMI 896 - CESTAT NEW DELHI], Approved in COMMR. OF C. EX. & S.T., JAIPUR-I VERSUS ERICSSON INDIA PVT. LTD. [2018 (1) TMI 1266 - RAJASTHAN HIGH COURT]. Proof of replacement of goods - HELD THAT:- It is observed that the SAP entries will prove that the goods retuned have been replaced or not. However, credit on the goods returned cannot be denied to the appellant on only procedural ground. Accordingly, the demand confirmed in the impugned order on this count is not sustainable and hence the same is set aside. Denial of CENVAT Credit related to services not used in relation to manufacture of final products - HELD THAT:- It is observed that the credit in this case has been availed by the Appellant on certain installation and other services which were availed in respect of Erection, Commissioning, Installation provided by the Appellant at the head office. It is observed that there is no specific finding in the impugned order for denial of this credit to the appellant. Accordingly, the appellant is eligible for this credit. Demand of duty on account of difference in book stock and physical stock in respect of Plate Hardox and MS Plate - HELD THAT:- The duty has been demanded from the appellant on the assumption that the said goods have been removed without payment of duty. We observe that the department has not produced any evidence to substantiate the allegation that the goods have been clandestinely removed by the Appellant without payment of duty. It is a settled law that no demand can be raised without any evidence or proof of clandestine removal. Since there is no evidence available on record to substantiate the allegation of clandestine removal, the demand confirmed in the impugned order on this count is not sustainable and accordingly the same is set aside. Since the demands of central excise duty and the reversal of Cenvat Credit confirmed in the impugned order are held to be not sustainable, the question of demanding interest and imposing penalty on the appellant does not arise. The impugned order is set aside - appeal allowed.
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