2015 (12) TMI 732

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.... to be used in the manufacture of their final product. The said imported inputs were cleared on payment of duty of CVD, education cess, SHE cess as also on payment of SAD. The duties so paid by the appellant were availed as credit. 2. Though appellants are using the said inputs in the manufacture of their final product but in case of surplus inputs, the same are removed as such by selling the same. At the time of removal of the said inputs, the appellant paid the duty of excise on the transaction value of the said inputs, by debiting the same out of the CENVAT credit so availed. 3. As per the audit conducted in the appellants factory, it was noticed that during the period August 2009 to September 2011, the appellant had cleared the inp....

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....e appellant on payment of duties for further use in the manufacture of their final product. The duties so paid by the appellant were availed as credit in their statutory records. However in some cases, the inputs being surplus were sold by the appellant on a transaction value and on payment of duty of excise. Such excise duty so paid by the appellant was debited from their CENVAT credit account. It is the appellants contention that while debiting the CENVAT credit account, they have paid more duty than the credit so availed by them inasmuch as the transaction value was higher than the imported value of the goods. 7. The issue is as to whether in such a scenario, the law requires separate reversal of SAD or not. In terms of the provisions ....

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....ffice the compliance to the provision of law. As per Rule 3(5) of CENVAT Credit Rules, 2004 the assessee has to reverse the amount equivalent to CENVAT Credit availed i.e. the components of credit BED, Ed cess, SHE and SAD which have been availed on receipt of imported inputs. In the instant case the assessee has adopted some amount as transaction value, which is appropriate for their business transactions and they have paid the BED and applicable Ed Cess and SHE Cess on the same on. As the value at which the inputs were imported was less than the transaction value, adopted for clearance "as such" the total amount of duties paid on the transaction value happens to be more than the CENVAT credit availed. It was not assessee intended practice....