TaxTMI 
TaxTMI 
2018 (8) TMI 1674
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....ying Central Excise duty. In addition, the appellant also sources these products from their sister unit and also other franchisee bottlers to cover to the market demands. Therefore the appellant is a) manufacturing these products b) trading these products after purchasing from other units c) procuring these products from sister units and selling them. The appellant have availed CENVAT credit and have opted to avail CENVAT credit on common input services and reverse the CENVAT credit under Rule 6(3A) in respect of exempted goods and services. During the period the amount of credit to be reversed was to be calculated as M/N x P where M denotes total value of exempted services + total value of exempted goods manufactured and removed dur....
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....activity has been reckoned for calculating the amount of CENVAT credit to be reversed. It is the Department's contention that the value of the goods which they received from the sister plant and sold in the market should also be considered as trading activity and the value of such trading should also calculate reckoned in the amount of CENVAT credit to be reversed. The Learned Counsel forcefully argued, since they are not purchasing bottles from the sister units and selling it does not amount to trading. They are receiving the goods from the sister units under the cover of stock transfer note, and this transfer does not amount to sale of goods because the appellant's sister unit and the appellants are one at the same entity. He relied on th....
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....ered for the purpose but not to the extent it was supplied to a factory registered as a different unit even though both are parts of the same legal entity and have the same PAN. 6. I have considered the arguments on both sides and perused the records. The facts of the case in dispute are that the appellant availed on common input services and goods and obtained to the services reversed under Rule 6(3A). The only questions to be decided are a) whether the value of the goods which they procured from the sister units and sold in the market should be reckoned as exempted services for calculating the CENVAT credit to be reversed or not; and b) whether the credit to be reversed should be taken as the proportion of "the total credit availed" ....
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....oney got transferred to the sister units and said that it will probably be through account adjustment by their head office; otherwise the sister units will keep spending money to produce bottles and the appellant keeps earning selling them. There must be a mechanism of transfer of the sell products or some part of it back to the manufacturing in sister units. These being from the same legal entity, it is possible that this transfer gets done through book adjustments by their accounts Department. Thus, I find no element of trading is missing when the appellant procures bottlers from their sister units and sells them. It is at par with the procurement of bottles from bottlers and selling except from the fact that they are not directly paying ....