TaxTMI 
TaxTMI 
2016 (12) TMI 159
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....se of Audit, it came to notice that the assessee had cleared their inputs namely Nickel Cathodes and Nickel HP Squares as such to their sister concern located at D-26, Phase-II, MIDC, Dombivli (E). As per Rule 3(5) of Cenvat Credit Rules, 2004, when inputs or capital goods, on which CENVAT credit has been taken, are removed as such from the factory the manufacturer of the final products shall pay an amount equal to the credit availed in respect of such inputs or capital goods and such removal shall be made under the cover of an invoice referred to in Rule 9 of Cenvat Credit Rules, 2004. It was noticed that though the assessee has paid/reversed amount equal to the credit taken on Basic duty, Education Cess & Secondary & Higher Education Cess....
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....er (Appeals) upheld the order of the Adjudicating Authority. Aggrieved by the same, the appellants are before this Tribunal. 5. The Ld. Advocate for the appellants submits that the entire exercise of stock transfer from unit No. I to unit No. II of the appellants was revenue neutral and as such there was no intention to evade any duty. She produced sample invoices showing stock transfer to unit II under Rule 11 of Central Excise Rules. She further added that there was no loss of the revenue and no undue benefit had been taken by them. The Ld. Advocate relied upon the following case laws to plead that extended period and penalties are not invokable on account of Revenue neutral situation: (i) Associated Drug Co. Vs. CCE - 2009 ....
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....L.T. 582 (Tri. - Mumbai) (iii) Yee Kay Technocrat Pvt. Ltd. Vs. CCE - 2011 (267) E.L.T. 92 (Tri.-Del.) (iv) CCE Vs. GL & V India Pvt. Ltd. 2015 (321) E.L.T. 611 (Bom.) (v) Shilpa Printing Press Vs. CCE - 2013 (297) E.L.T. 417 (Tri. - Mumbai) (vi) M/s Automotive Stampings And Assemblies Ltd Vs. CCE - 2015-TIOL-836-CESTAT-MUM (vii) Star Industries Vs. CCE - 2015 (324) E.L.T. 656 (S.C.) 7. Heard the parties and perused the record. 8. Rule 3(5) of the Cenvat Credit Rules, 2004 is extracted below:- "When inputs or capital goods, on which CEVAT credit has been taken, are removed as such from the factory, or premises of the provider of output service, the manufacturer of the final products o....
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....ic excise duty but did not reverse the credit on account of special additional duty has not been satisfactorily explained by the Director in his replies during the statement particularly since the law is quite unambiguous and when they were reversing the credit of special additional duty for the removal to other customers. The entire situation also needs to be seen in the context that the appellants are registered with the department for a long time and are well aware of the laws and procedures. Very clearly, there is an element of suppression and intention to evade duty. 9. The Ld. Advocate has raised the issue of revenue neutrality and claimed that there was no intention to evade duty. The Commissioner (Appeal)'s findings recorded ....
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....eversed part credit only." 10. The Ld. Advocate as well as Ld. A.R. have produced judgments in favour of the assessee as well as in favour of the Revenue on the issue of revenue neutrality. In the instant case if the situation was revenue neutral, as argued by appellants, there was no need to even to reverse the input credit of basic excise duty. In a recent judgment in the case of Star Industries Vs. Commissioner of Customs (Imports), Raigad - 2015 (324) E.L.T. 656 (S.C.) which has relied upon by Ld. A.R., the Hon'ble Supreme Court has observed as under:- "35. It was submitted by the learned counsel for the assessee that the entire exercise is Revenue neutral because of the reason that the assessee would, in any case, get Cen....