2015 (10) TMI 2584 - AT - Central Excise

Denial of cenvat credit alongwith interest and imposition of penalty - Dises - Held that - The appellants had taken 100% cenvat credit on Dises instead of 50% of cenvat credit in the same financial year and the balance 50% of cenvat credit are to be taken in any financial year subsequent to the financial year in which the capital goods are received - the demand of cenvat credit alongwith interest on this issue is justified. Denial of cenvat credit on plastic crates/ bins used for outward transportation of the final product - Held that - The appellant contended that the value of plastic crates/bins cleared alongwith the final products was included in the value of the final product. Hence there is no reason to deny the cenvat credit on this issue. Demand of interest on payment of the differential duty on supplementary invoices raised due to enhancement of the Assessable value with retrospective effect on the excisable goods manufactured and cleared by the appellant - Held that - I find that this issue is decided by the Hon ble Supreme Court in the case of CCE Pune vs. SKF India Ltd. 2009 (7) TMI 6 - SUPREME COURT where it was held that it is to be noted that the assessee was able to demand from its customers the balance of the higher prices by virtue of retrospective revision of the prices. It therefore follows that at the time of sale the goods carried a higher value and those were cleared on short payment of duty. The differential duty was paid only later when the assessee issued supplementary invoices to its customers demanding the balance amounts. Seen thus it was clearly a case of short payment of duty though indeed completely unintended and without any element of deceit etc. The payment of differential duty thus clearly came under sub-section (2B) of section 11A and attracted levy of interest under section 11AB of the Act. The impugned order is modified in so far as demand of cenvat credit alongwith interest is set aside. As the issues involved are interpretation of the provisions of law penalty is set aside. The appeal field by the appellant is partly allowed - decided partly in favor of assessee.

Summary

Issues involved:
1. Denial of cenvat credit along with interest and imposition of penalty for taking 100% cenvat credit on Dises instead of 50% in the same financial year.
2. Denial of cenvat credit on plastic crates/bins used for outward transportation of final products.
3. Demand of interest on payment of differential duty on supplementary invoices due to enhancement of Assessable value with retrospective effect on excisable goods.

Analysis:

1. The appellants appealed against the denial of cenvat credit, interest, and penalty for taking 100% cenvat credit on Dises instead of the prescribed 50% in the same financial year. The Tribunal found the demand of cenvat credit along with interest to be justified as per the provisions. The balance 50% of cenvat credit was to be taken in a subsequent financial year after receiving the capital goods. The Tribunal upheld the denial of credit in this regard.

2. Another issue raised was the denial of cenvat credit on plastic crates/bins utilized for outward transportation of final products. The appellant argued that the value of these plastic crates/bins was already included in the final product's value, thus justifying the claim for cenvat credit. However, the Tribunal did not find merit in this argument and upheld the denial of cenvat credit on this issue.

3. The demand for interest on the payment of differential duty on supplementary invoices due to the retrospective enhancement of the Assessable value on excisable goods was also contested. The Tribunal referred to a judgment by the Hon'ble Supreme Court in a similar case to address this issue. Following the legal precedent, the Tribunal made a decision regarding this demand and its implications on the excisable goods manufactured and cleared by the appellant.

4. In the final decision, the Tribunal modified the impugned order by setting aside the demand of cenvat credit along with interest mentioned in a specific paragraph. As the issues involved interpretation of legal provisions, the penalty was also set aside. Consequently, the appeal filed by the appellant was partly allowed, with the operative part of the decision pronounced in the open court.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved and the Tribunal's decision on each matter, addressing the legal nuances and key arguments presented by the parties involved in the case.