We have purchased goods from our vendor in Feb.13 and availed cenvat credit on that.
Now, Excise department given us notice that reverse the same since our vendor has not paid the duty on it.
pl advice whether we have to reverse or not. if not pl give us any judgement so we can give them reply.
Company Not Required to Reverse CENVAT Credit if Vendor Fails to Pay Duty, Say Experts and Precedents A company received a notice from the Excise Department to reverse CENVAT credit on goods purchased in February 2013 because the vendor hadn't paid the duty. Experts advised that if the company paid the full amount, including excise duty, without collusion or fraud, they should not reverse the credit. Various legal precedents support this, emphasizing that buyers should not be penalized for the vendor's failure to pay duty. The department can recover unpaid duties from the vendor, and requiring buyers to verify vendor payments is impractical. This ensures no unjust enrichment occurs for the government. (AI Summary)
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