GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (6) TMI 577 - CESTAT MUMBAI

2016 (6) TMI 577 - CESTAT MUMBAI - TMI - Valuation - Invokation of extended period of limitation - Inputs cleared to their sister unit on reversal of the credit availing on such inputs - Whether to be valued at the prices at which sale was made to independent buyers - Held that:- by relying on the judgment of Hon'ble Apex Court in the case of Ispat Metallics Industries Ltd., Vs. CCE, Raigad [2005 (10) TMI 129 - CESTAT, MUMBAI], where the goods are entirely transferred to a sister unit, it is rea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sai, Supdt. (AR) for respondent ORDER Per M. V. Ravindran 1. This appeal is directed against Order-in-Appeal No.AT/54/M-III/2007 dated 23/02/2007 passed by Commissioner of Central Excise (Appeals), Mumbai-III. 2. The relevant facts that arise for considerations are that the appellant herein is availing Cenvat Credit on Central Excise duty paid on various inputs during the period 01/04/2000 to 21/02/2003. They had cleared some quantity of inputs as such to their sister unit on reversal of credit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nt is required to discharge the duty liability on the inputs cleared as such to their sister unit on the value of the item received from the independent buyers. 3. The learned AR appearing on behalf of the appellant draws our attention to various documents and the issue in the case. It is his submission that while reversing the Cenvat Credit on the inputs cleared to their sister unit, they have done so based on the Circular issued by the Board more specifically. Circular No.6/39/2000-CX-I dated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

judgement of the Tribunal. He produces a copy of the said judgement of the Apex Court. 4. The learned DR on the other hand would submit that the provisions of Rule 57AC of the Cenvat Credit Rules, 2001 needs to be considered in the case in hand. It is his submission that the said rule specifically talks about the determining the value of the inputs cleared as such which would mean that the value has to be re-determined and the case in hand, the value as ascertained from the clearances made to in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

le on such inputs cleared as such. 7. The lower authorities as well as the departmental representative were relying upon the Board Circular No.816/13/2005-CX dated 16/06/2005, according to which the provisions of Rule 57AB (1B) of Central Excise Rules, 1944 or Rule 3 (4) of Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2002 will be applicable in the case in hand is the clarification given by the Board. 8. We do not find any merit in the arguments put forth by the learned DR and the judgemen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

set out the relevant rules. Rule 57AB(1C) of 6 Page 7 the Central Excise Rules, 1944 and Rule 3(4) of the Cenvat Credit Rules, 2001 as they read at the relevant time, read as follows:- 57(1C) When inputs or capital goods, on which credit has been taken, are removed as such from the factory, the manufacturer of the final products shall pay an amount equal to the duty of excise which is leviable on such goods at the rate applicable to such goods on the date of such removal and on the value determ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

der Section 4 or Section 4A of the Act, as the case may be, and such removal shall be made under the cover of an invoice referred to in rule 7. 10. The Tribunal being the last forum of appreciation of facts has held that transfer of iron ore pellets by IIL to IMIL was not a sale of goods but was only a transfer of raw materials procured under the Tripartite Agreement between the two of them and 7 Page 8 the supplier of the said pellets. This is a pure finding of fact and Shri Radhakrishnan has n .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch credit has been taken, are removed as such on sale, there should be no problem in ascertaining the transaction value by application of sec.4(1)(a) or the Valuation Rules. [Provided tariff values have not been fixed for the inputs or they are not assessed under Section 4A on the basis of MRP ] There may be cases where the inputs or capital goods are removed as such to a sister unit of the assessee or to another factory of the same company and where no sale is involved. It may be noticed that s .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of time, the value nearest to the time of 8 Page 9 removal should be adopted). Problems will, however, arise where the assessee does not sell the inputs/ capital goods to any independent buyer and the only removal of such input/ capital goods, outside the factory, is in the nature of transfer to a sister unit. In such a case proviso to rule 9 will apply and provisions of rule 8 of the valuation rules would have to be invoked. However, this would require determination of the cost of production or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

shown in the invoice on the basis of which CENVAT credit was taken by the assessee in the first place. In respect of capital goods adequate depreciation may be given as per the rates fixed in letter F No. 495/16/93-Cus.VI dated 26.5.93, issued on the Customs side. 11. A reading of this circular makes it clear that a distinction is made between inputs on which credit has been taken which are removed on sale, and those which are removed on transfer. If 9 Page 10 removed on sale, transaction value .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version