Home Case Index All Cases Central Excise Central Excise + AT Central Excise - 2017 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (12) TMI 139 - AT - Central ExciseDemand of reversal of differential amount - appellant has cleared the goods to related persons which were exempt - Whether M/s SPL and M/s SPML are related person or not? - whether the provision of Rule 9 read with Rule 8 of the Central Excise Valuation Rules, 2000 are applicable in the facts of this case or not? - Held that: - we find that the goods are required to be sold by M/s SPL through M/s SPML the related person - by availing credit of duty paid on inputs going into the manufacture of both categories of pipes, the assessee was required to reverse Cenvat Credit equivalent to 8% of the value of the exempted goods as per the provisions of Rule 6 (3) (b) of Cenvat Credit Rules, 2002. But the assessee did not reverse the same correctly. The reversal of Cenvat Credit shown in the ER-1 returns is neither at the rate of 8% of the sale value of exempted pipes nor on actual basis, as all the inputs consumed in the manufacture of exempted goods were not taken into consideration while calculating the actual reversal. Moreover, the reversal on actual basis at the time of clearance is not permissible under the Rules. Thus, the assessee has short reversed the Cenvat Credit amounting to ₹ 3,20,429/- as per the details given in Annexure B to this show cause notice by mis-declaring the facts as well as the value of the goods as stated in the foregoing paragraphs. M/s SPL is clearing these pipes to M/s SPML as well as to independent buyers if that is the case than provisions of Rule 9 read with Rule 8 are not applicable to the facts of this case - relying on the provisions of Rule 9 read with Rule 8 of the Valuation Rules 2000, we hold that the demand is not sustainable against the appellants. Whether in terms of Finance Act, 2010 the reversal of proportionate Cenvat Credit attributable to exempted goods is sufficient or not? - Held that: - As per the Section 72 of Finance Act, 2010 which provides that if the Cenvat Credit attributable to exempted goods has been reversed, the same is sufficient and it is fact on record that the M/s SPL had reversed the Cenvat Credit attributable to the Pipes/Plate Plate exempted then they are not required to pay 8% of the value of the exempted goods. Therefore, on that account, the demand is not sustainable. Whether M/s SPL is required to pay duty on Bearing/Wearing Plate or not? - Held that: - As without Bearing/Wearing Plate pipe cannot be laid down and the same is in the case of pipe fittings. Without pipe fittings also pipe cannot be laid down - M/s SPL is entitle for exemption under Notification No. 06/2002 for clearance of Bearing/Wearing Plate. Whether the extended period of limitation is invokable to the facts of this case or not? - Held that: - there is no concept in the Central Excise Act/Rules to declare in advance that M/s SPL and M/s SPML are related person, therefore, it cannot be attributable that appellant has suppressed the fact that they are related person - As the necessary certificate obtained by M/s SPL in that circumstances, it cannot be alleged that M/s SPL is having malafide intention to misclassify the Bearing/Wearing Plate as pipes - extended period not invokable. Appeal allowed - decided in favor of appellant.
|