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2018 (8) TMI 1674 - AT - Central ExciseReversal of Cenvat Credit - Exempted service or not? - CENVAT Credit on common input services and goods reversed u/r 6(3A) - Whether the value of the goods which they procured from the sister units and sold in the market should be reckoned as exempted services for calculating the CENVAT credit to be reversed or not? - Held that:- This issue has been settled by the Hon’ble High Court of Gujarat in the case of Sintex Industries Ltd., [2013 (6) TMI 178 - GUJARAT HIGH COURT] that as far as the CENVAT credit is concerned, what is relevant is not whether assesses are a single legal entity or not and whether they have a common PAN or not even whether the two units share a common area. What is relevant is whether they are separate registrants under the Central Excise. In the present case, an appellant is procuring bottlers from their sister units on excise invoices issued in their name along with the stock transfer challans. Thereafter, the assessee is selling the goods to their customer - no element of trading is missing when the appellant procures bottlers from their sister units and sells them. It is at par with the procurement of bottles from bottlers and selling except from the fact that they are not directly paying their suppliers for the bottles supplied - the appellant is required to reverse the CENVAT credit as per Rule 6(3A) of CENVAT Credit Rules, 2004 including the value of these bottles procured from the sister units and sold in the market. Whether the credit to be reversed should be taken as the proportion of “the total credit availed” or only proportion of “the common input service credit” availed? - Held that:- A perusal of the formula for reversal shows that the amount of credit to be reversed is proportionate to the value of exempted goods and services to the total value of goods and services (both exempted and dutiable or taxable) to the “total CENVAT credit taken on input services”. In view of the plain language in which the Rule is drafted, there is no scope to read the words “total CENVAT credit taken on input services” as “total CENVAT credit taken on common input services” - Further, Rule 6 of CENVAT Credit Rules, 2004 itself gives several options for the assessee to choose from and they chose this option. If this did not suit them, they could have taken another option. Extended period of limitation - Held that:- The short payment made by the assessee came to light only during the verification of the course by the Departmental officers. The assessee profited by not reversing the CENVAT credit correctly in terms of the option they choose and thereby gained CENVAT credit and to that extent evaded payment of duty which they would have had to pay in cash - extended period rightly invoked. Appeal dismissed - decided against appellant.
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