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Commissioner of Central Excise, Customs & Service Tax, Vapi Versus M/s Tarapur Grease India Pvt. Ltd., Vinod Vyas, Bharat Vyas, M/s Standard Grease, M/s Standard Oil And Grease

2015 (11) TMI 1168 - BOMBAY HIGH COURT

Availment of CENVAT Credit - Whether the cenvated inputs were actually exchanged between the three units without reversal of equivalent credit or the same were sold out to some other persons - allegation of clandestine removal - Revenue neutrality - Held that:- Tribunal found that once the inputs have been delivered only at the factories of the assessees from the associate companies, then no loss occurs to revenue. The assessees would derive no benefit by not reversing CENVAT credit on the input .....

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eafter when these inputs or raw materials were utilized in the manufacture of the final product, the CENVAT credit could have been claimed but this procedure was not followed. - merely because the penalty has been notionally imposed on all the assessees, does not mean that the Tribunal's earlier conclusion, and by applicability of the principle of revenue neutrality, is perverse or vitiated by any error of law apparent on the face of record. Imposition of the notional penalty is for infraction o .....

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challenging the order passed by the Customs, Excise and Service Tax Appellate Tribunal, West Zonal Bench, the principal contention is that the stand of the Assessee (Respondent before us) that there is revenue neutrality, should not have been accepted in the absence of evidence on record. 2. Mr.Oak appearing on behalf of Revenue in support of this appeal submits that there was no evidence on record proving that inputs on which credits were taken, were merely exchanged by the assessees with assoc .....

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tained and must be set aside. 3. Mr.Shah, on the other hand, submitted that the Tribunal was dealing with appeals of the assessees. The appeals were filed by one M/s.Standard Oil and Grease and M/s.Tarapur Grease India Private Limited so also some individuals. The order in original dated 31 January/29 February 2012 was challenged because M/s.Standard Grease, Silvassa ('SGS') is engaged in the manufacture of petroleum, lubricating grease, lubricating preparations etc. falling under Chapte .....

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e companies were merged in Standard Grease and Specialities Pvt.Ltd. with effect from 1 April 2008. The basic raw material is the same. The basic raw material procured was exchanged between these three entities on which CENVAT Credit is taken. This is in order to meet the urgent requirement of raw materials. Though the documents and books are privately maintained, yet on search and seizure, it was found that the goods were never diverted to any third parties but were utilized Inter-se. This argu .....

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ts cleared by the assessees without reversal of the CENVAT Credit were sent elsewhere. Mr.Shah, therefore, submits that the conclusion of the Tribunal in paragraph 5.2 of the impugned order is consistent with the material placed on record. Eventually those with whom the inputs were exchanged, would have claimed credit on the same and when they were utilized in the manufacture of final product, then, this conclusion should be sustained and raises no substantial question of law. The appeals theref .....

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thout payment simply because they were exchanged with the associate companies. It is no doubt true that the procedure adopted was not in consonance with the formalities prescribed by law, however, even the examination of private books and the entries therein having been corroborated by the transporters, resulted in no revenue loss, then, the Tribunal's conclusion cannot be said to be perverse. The Tribunal has found that the jurisdictional Gujarat High Court considered a similar controversy .....

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