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Larsen & Toubro Limited Versus Commissioner of Central Excise, Mumbai- II

2015 (11) TMI 465 - CESTAT MUMBAI

Reversal of CENVAT Credit - determination of price of exempted goods under Rule 6 of CCR - For the purpose of reversal of 10% whether the basic contract price should be taken or price plus 10% reversal collected should be taken - Held that:- From the contract documents that there is specific price fixed for sale of the goods and in that price there is no addition of this 10% in the form of the price. There is clause in the purchase order that against all the reversal of 10% customer shall pay th .....

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CR, 2004, prior to 1/4/2008 the 10% reversal is required to made on “price” of the goods and subsequent to 1/4/2008 it was amended and according to which 10% reversal was to be made on the “value” of the exempted goods. It was also clarified that value which is determined as per Section 4 or 4(A) of Central Excise Act, 1944, read with Rule made under. Prior to 1/4/2008 the price of which 10% reversal was to be made had no relevance to the Section 4 or 4(A) and it is also fact that term “price” m .....

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tioner : Shri. Prasad Paranjape, Advcoate For the Respondent : Shri. V.K. Shastri, Asstt. Commissioner (A.R.) ORDER Per : Ramesh Nair The appeal is directed against Order-in-Appeal No. YDB/62/ M-II/ 2010 dtd. 3/2/2010 passed by the Commissioner of Central Excise (Appeals), Mumbai Zone-II, wherein Ld. Commissioner (Appeals) upholding the Order-in-Original, rejected the appeal of the appellant. 2. The fact of the case is that appellant had cleared goods at NIL rate of duty to Dept of atomic energy .....

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mer. In the show cause notice, it was alleged by the department that extra charges of 10 % recovered from the customer had increased price of exempted final product and the appellant were required to pay an amount of 10% of the total price including amount of 10%. Accordingly it was proposed to recover an amount ₹ 2,96,640/- being difference between amount equal to 10% of the total price of exempted product (inclusive of 10%) and amount actually debited by the appellant. The adjudicating a .....

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is squarely covered by the larger bench judgment in case of Unison Metals Ltd. Vs Commissioner of C. Ex., Ahmadabad-I, reported in [2006(204) ELT 323 (Tri)] wherein though the issue was demand under Section 11D, the fact was absolutely identical that assesse had paid an amount under Rule 6(3)(b) and collected the same from customers whom the goods were cleared under exemption. He submits that the issue involved in the present case is under identical set of facts of misons case and no demand was .....

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of Atomic Energy under particular contract. As per the contract documents, he referred the price which is fixed under the contract and said price is inclusive of 10% reversal under Rule 6(3)(b) and the same contract also has terms which also shows that the reversal of Cenvat on exempted goods shall be paid towards said reversal against documentary evidence. As per this terms of contract, the price is not inclusive of the reversal amount therefore the basic price for which contract was made, alon .....

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exempted goods. On this he submits that prior 1/4/2008 it is price on which 10% to be calculated for the reversal. This clearly shows that prior to 1/4/2008 it is the price which attract 10% reversal and not price inclusive of 10% as contended by the department. He submits that this amendment has significance on the issue. On the issue of limitation he submits that entire period of demand is beyond the normal period of one year and show cause notice has not alleged any ingredient of proviso to 1 .....

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yment and reimbursement thereof and also the contract price. Since goods were cleared under exempted Notification No. 10/97-CE, as per the condition of exemption certificate required to be submitted to the department. They have undisputedly produced such exemption certificate to the Jurisdictional superintendent vide their letter dated 8/10/2004. The said exemption certificate bearing number of purchase order under which, clause of 10% reversal and reimbursement thereby has been mentioned. He al .....

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of said amount from the customer stand disclosed to the department. Therefore, there is no iota of doubt that the appellant has not suppressed any facts from the department. Therefore, entire demand is barred by limitation, as proviso to Section 11A is not invokable, in these facts and circumstances of the case. On the above submission he prays for allowing the appeal and set aside the impugned order. 4. On the other hand, Shri V.K. Shastri, Ld. Asstt. Commissioner (A.R.) appearing on behalf of .....

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ssions made by both sides and perused records. 6. The issue to be decided by me that is for the purpose of reversal of 10% whether the basic contract price should be taken or price plus 10% reversal collected should be taken. I find from the contract documents that there is specific price fixed for sale of the goods and in that price there is no addition of this 10% in the form of the price. There is clause in the purchase order that against all the reversal of 10% customer shall pay the same am .....

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6(3)(b) and amendment thereon w.e.f. 1/4/2008 and subsequently clarification issued by the Board vide circular dated 16/5/2008, relevant portion of clarification is reproduced below: The matter has been examined. Sub-rule (3) of rule 6 of the?3. CENVAT Credit Rules, 2004 has been amended w.e.f. 1-4-2008 to provide for payment of an amount equal to 10% of value of the exempted goods, instead of 10% of the price of the exempted goods as provided earlier. The value is to be determined as per secti .....

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