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Tribunal rules on Cenvat credit & related party clearances, remands for interest verification. The Tribunal set aside the demand of Rs. 46,34,733 for denial of Cenvat credit, confirmed the demand of Rs. 2,85,123 for clearances to related persons at ...
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Tribunal rules on Cenvat credit & related party clearances, remands for interest verification.
The Tribunal set aside the demand of Rs. 46,34,733 for denial of Cenvat credit, confirmed the demand of Rs. 2,85,123 for clearances to related persons at lower prices, along with interest and penalty, and remanded the matter to verify if interest on supplementary invoices was paid.
Issues: 1. Denial of Cenvat credit under Rule 16 of the Central Excise Rules 2002 2. Clearances of goods to related persons at lower prices 3. Demand of interest on supplementary invoices
Issue No. I: Denial of Cenvat credit under Rule 16 The appellant availed Cenvat credit for defective goods returned by buyers, which were later cleared after rectifying the defects. The Revenue alleged wrongful credit availed of Rs. 46,34,733. The Tribunal found evidence of goods being cleared after rectification, setting aside the demand as no contrary evidence was presented by the Revenue.
Issue No. II: Clearances of goods to related persons at lower prices The appellant cleared goods to related persons at lower prices compared to other buyers. The Tribunal held that duty should be paid on goods cleared to related persons at the value for other buyers. The demand of Rs. 2,85,123 was confirmed along with interest and penalty for non-payment of interest on the differential value.
Issue No. III: Demand of interest on supplementary invoices The appellant was required to pay interest on supplementary invoices as per the SKF India Ltd. case. The Tribunal noted that the appellant claimed to have paid Rs. 3,873 towards interest, but the matter needed verification. The case was remanded to the adjudicating authority to confirm if the interest on supplementary invoices was paid.
In conclusion, the Tribunal: a) Set aside the demand of Rs. 46,34,733 for denial of Cenvat credit b) Confirmed the demand of Rs. 2,85,123 for clearances to related persons, along with interest and penalty c) Remanded the matter to verify if the interest on supplementary invoices was paid. The appeal was disposed of with these terms.
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