Tribunal Rules Undervaluation and Shortage Claims Unsustainable; CENVAT Credits Allowed, No Penalties Imposed.

The CESTAT disposed of the appeal with the following key holdings: Undervaluation relating to stock transfer to their own unit and sale to sister unit was held not sustainable as it was a revenue-neutral situation. Demand of Rs.1,94,02,717/- and Rs.52,28,055/- set aside. Demand of Rs.1,15,616/- for short receipt of methanol set aside following the tribunal's earlier ruling allowing transit loss. CENVAT credit of Rs.2,50,647/- for inputs used in research and development allowed as it relates to manufacturing activity. CENVAT credit of Rs.14,86,640/- and Rs.34,88,013/- taken on endorsed invoices/bills of entry allowed following the Allahabad High Court's ruling. Demand of Rs.14,04,491/- for alleged shortage of finished goods set aside due to lack of evidence on clearances, transportation, and recipients. Consequently, no penalty was imposable on the appellant. .....

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