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M/s Bharat Heavy Electrical Ltd Versus Commissioner of Central Excise & Service Tax, Bhopal

2015 (10) TMI 1680 - CESTAT NEW DELHI

Valuation - Calculation CENVAT credit reversed under Rule 6(3) and recovered from the customers – The Department, was of the view that the assessable value for the purpose of payment of the amount under Rule 6(3) would also include the amount of 5% / 10% of the sale price being recovered by the appellant from the customers and the appellant would be liable to pay an amount @ 5% / 10% on the extra amount of 5% / 10% being recovered from the customers - Difference of opinion - Majority order - Hel .....

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ming any deduction of 5% / 10% on the said amount. Therefore, appellant is not required to pay 5% / 10% to the Revenue on the amount recovered from the buyer on account of amount paid to the Revenue as per Rule 6(3) of the Cenvat Credit Rules 2004. In these circumstances, I take support of the decisions in the case of Unison Metals Vs. CCE-[2006 (10) TMI 171 - CESTAT, NEW DELHI] and in the case of CCE Vs. Kisan Sahkari Chini Mills Ltd.-[2001 (8) TMI 119 - SUPREME COURT OF INDIA] to hold that the .....

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een referred to me to be answered. 18.1 Whether the appeal has to be allowed on the point of limitation and penalty and the matter is required to be remanded to the Commissioner for re-quantification as held by my learned brother Member (T) or the impugned order is required to be set aside in its totality and the appeal is required to be fully allowed as held by learned Member (J). 19. The facts are not in dispute. Therefore, same are not repeated here. But for consideration of the issue, I find .....

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of the Cenvat Credit Rules 2004 to the department and also recovering the said amount from the buyers of the goods. The controversy arose that the amount recovered from the buyers of the goods in addition to the value of the goods i.e. (5% / 10% of value of exempted goods) the appellant is required to pay 5% / 10% on this additional value to the department. Therefore, in nutshell the issue is that whether the appellant is required to pay 5% / 10% of the amount paid as per provision Rules 6 (3) .....

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22. The term "value" has not been defined under the Act. In Central Excise Act, the term value is known as "Assessable value" i.e. value of goods on which duty is payable. In this case, the contention of the Revenue is that the appellant is required to pay 5% / 10% of the sale price of the exempted goods. Therefore, it is necessary to understand which is sale price. 23. The term "Sale Price" means the price at which the goods is sold to the Customer which is differe .....

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he sale price of the goods is ₹ 110/-. 26. If the appellant is manufacturing exempted final product then also value of input is ₹ 50/- (Cenvat Credit availed on input) plus cost of production is ₹ 50/-. The value of goods is ₹ 100/-. Appellant is paying 5% / 10% of this ₹ 100/- to the Department for availment of Cenvat Credit on inputs as per Rule 6 (3). The appellant has recovered 10% from the buyers as per Rule 6(3) ibid, therefore, the Revenue is seeking the appe .....

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oes not arise by a simple logic as stated above. As per Rule 6(3) ibid, the appellant is required to pay 5% / 10% of the value of exempted goods not of the sale price. 27. Now come to the facts of this case. The only dispute as per me is that what should be the value of the goods. 28. In this case appellant is availing Cenvat Credit on the inputs and manufacturing dutiable as well as the final product. The value of the goods works out to equal in both the cases i.e. dutiable / exempted goods. 5% .....

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