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SC upholds plea of revenue neutrality in case of captive consumption to set aside invocation of extended period

Central Excise - By: - Bimal jain - Dated:- 15-6-2015 - Dear Professional Colleague, We are sharing with you an important judgment of the Hon ble Supreme Court, in the case of Nirlon Ltd. Vs. Commissioner of Central Excise, Mumbai [2015 (5) TMI 101 - SUPREME COURT] on the following issue: Issue: Whether extended period can be invoked when entire exercise is revenue neutral i.e. credit of duty paid on captive consumption is available to assessee itself? Facts: Nirlon Ltd. ( the Appellant ) was en .....

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f ex-factory sales and price declaration for the same were filed with the Department. After examination, it was found that there was a difference between the goods which were cleared at the factory gate to be sold to the third parties and the goods removed for captive consumption by the Appellant for its Tarapur factory. Accordingly, the Ld. Commissioner appointed a Cost Accountant for verification and in his Report, it is was submitted that the two goods are different from each other and theref .....

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matter was decided against the Appellant. Being aggrieved, the Appellant preferred an appeal before the Hon ble Supreme Court. Held: The Hon ble Apex Court held that even though the goods were found to be different, payment of duty taking comparative value was done with bona fide belief. When entire exercise was revenue neutral (i.e. credit of duty paid on captive consumption was available to the Appellant itself), the Appellant could not have achieved any purpose to evade duty. Hence, extended .....

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