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2015 (10) TMI 1670 - CESTAT BANGALOREDenial of CENVAT Credit - Penalty u/s 77 & 78 - Denial on the ground that appellant should have reversed it and transferred it under a proper invoice - Held that:- Stock transfer should not have taken place when a proper invoice is not issued, appropriate action should have been taken against Mumbai unit and because of merger no action could have been initiated against Mumbai unit since it ceased to exist. Since there is no dispute that the Bangalore unit had reversed the credit while transferring the inputs, the impugned order taking a view that the credit has to be denied and demanded cannot be sustained. At the same time it has to be taken note of fact that the procedure followed by the appellant for transferring the stock of inputs just by reversal without raising a proper invoice to their Mumbai Unit was not in accordance with the law. Since the denial of credit cannot be sustained, the demand for CENVAT credit availed with interest and penalty under Section 78 on the appellant cannot be sustained. Further, penalty of ₹ 10,000/- has been imposed under Section 77 of Finance Act, 1994 for contravention of Rule 3(5) and Rule 9(1)(f) of CENVAT Credit Rules, 2004. In my opinion, this penalty is sustainable since the appellant failed to issue a proper invoice and that was required in accordance with law. - demand for CENVAT credit and interest thereon and penalty under Section 78 are set aside and penalty of ₹ 10,000 imposed under Section 77 is upheld. - Decided partly in favour of assessee.
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