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2015 (10) TMI 335 - CESTAT AHMEDABAD

2015 (10) TMI 335 - CESTAT AHMEDABAD - TMI - Availment of CENVAT Credit - supplementary invoices - contravention of the provisions of Rule 9(b) of CENVAT Credit Rules, 2004 - Held that:- Appellant availed CENVAT Credit of ₹ 10,36,468.00 on the basis of supplementary invoices issued by their sister unit at Mumbai. Commissioner of Central Excise, Mumbai has passed an order dt.25.11.2005 to their sister unit at Mumbai demanding differential duty of ₹ 10,36,468.00 as the Mumbai unit fail .....

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escalation, which was paid by sister unit. Hence, the decision of Honble Karnataka High Court in the case of Karnataka Soaps & Detergents Ltd (2010 (2) TMI 524 - KARNATAKA HIGH COURT) would be applicable in the present case. As the decision of Honble High Court is directly on the issue, the decision of Mumbai Tribunal as relied upon by the learned Authorised Representative is not applicable. - CENVAT Credit taken by the Appellant on the strength of supplementary invoice issued by their sister .....

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Cream, Lotion, Stearic Acid, Hydrogenated Oils etc classifiable under Chapter 15, 34, 38 and 33 of the Central Excise Tariff Act, 1985. They received the Fatty Acids, Soap Noodles from their sister unit at Mumbai for use in the manufacture of their final product. It was found that their sister unit failed to pay the duty on the cost of escalation. As per Order dt.25.11.2005, the sister unit paid the differential duty of ₹ 10,36,468.00 and raised the supplementary invoice to the appellant. .....

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alongwith interest and imposed penalty of equal amount of CENVAT Credit. The Commissioner (Appeals) upheld the Adjudication order. 2. The learned Advocate on behalf of the Appellant submits that it is a case of stock transfer and there is no sale. Therefore, Rule 9(b) of said Rules cannot be invoked. In this context, the learned Advocate drew the attention of the Bench to the relevant portion of the Adjudication order. He strongly relied upon the decision of Honble Karnataka High Court in the c .....

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td 2007 (208) ELT 95 (Tri-Mum.). In that case, the Tribunal allowed the appeal of the Revenue as there was suppression of facts, while issuing the supplementary invoices. He also submits that there is no indication that it is case of stock transfer. 4. After hearing both the sides and on perusal of the records, I find from the Adjudication order that the Appellant availed CENVAT Credit of ₹ 10,36,468.00 on the basis of supplementary invoices issued by their sister unit at Mumbai. Commissio .....

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e to the sister unit. 5. The main contention of the learned Advocate is that it is a case of transfer of the goods from one unit to another and therefore, there cannot be sale. The learned Authorised Representative for the Revenue submits that the Appellant had not taken any categorical stand that there is no sale. On perusal of the impugned order, it is evident that the Appellant received the goods from their sister unit. Revenue has not disputed this fact. Thus, it is obvious that there cannot .....

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le. The relevant portion of the said decision is reproduced below: 37. The revenue has contented that tribunal was in error in holding prohibition under Rule 7(1)(b) will not be applicable to the facts of the case. Per contra Sri. Shivdas would vehemently contend that department/revenue cannot deprive the assessee of taking Cenvat credit of the additional duty paid. When admittedly there is no sale and it was only a stock transfer and hence assessee would not be hit by exclusion clause under Rul .....

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