TaxTMI 
TaxTMI 
2024 (4) TMI 899
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.... Cenvat Credit on various issues. The Notice was adjudicated vide the impugned order wherein the demand of Central excise duty and denial of Cenvat credit as proposed in the Notice has been confirmed along with interest and equal amount of duty as penalty. Aggrieved against the impugned order, the appellant has filed this appeal. 3. The appellant summarized the demands confirmed in the impugned order under the following categories as tabulated below: Issue Period Amount (Tax) Valuation of goods stock transferred to the sister unit - non-inclusion of costs in CAS-4 2009-10 to 2011-12 (till August 2011) INR. 53,55,205/- Valuation of goods sent free of cost to customers- value adopted is lower than the value at which the same is sold to customers 06.04.2007 to 05.09.2011 INR. 4,51,526/- CENVAT Credit taken on goods rejected, returned to the supplier, and subsequently replaced/received in the factory 2009-10 and 2011- 12 INR. 4,71,599/- CENVAT Credit of services not used in relation to manufacture of final products 31.03.2008 to 07.04.2011 and 08.04.2011 to August 2011 INR. 25,020/- Difference in book stock and physical stock in respect of Plate Hardox and MS Plateremo....
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....nt contended that the demand confirmed in the impugned order on this count is not sustainable. 4. Regarding short payment of duty amounting to Rs.4,51,526/- on the goods sent free of cost to customers, the appellant submits that they have correctly adopted the valuation method (110% of the cost) to pay duty on the free supplies to customers. The department found the method as incorrect and contended that the value of free supply materials should be on the basis the value of goods sold by them for delivery at any other time nearest to the time of removal of goods under assessment. The Appellant submits that the goods sent free of cost are samples and there is no comparable sale made to any other customer. Thus, the valuation adopted by the Appellant is valid and there is no short payment of tax. Accordingly, they contended that the demand confirmed on this count is not sustainable. 5. Regarding CENVAT Credit of Rs.4,71,599/- taken on the goods rejected by the customers and returned to the supplier and subsequently replaced, the appellant submits that in the impugned Order, it has been held that no CENVAT Credit can be availed on goods rejected and returned by the Appellant since t....
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.... removed by the Appellant without payment of duty. It is a settled law that no demand can be raised without any proof of clandestine removal. Reliance in this regard is placed on the decision of the Tribunal in the following cases: * Krupalu Metals Pvt. Ltd. v. CCE & ST Rajkot 2024-VIL-167-CESTAT-AHM-CE * Kakkar Complex Steels Pvt. Ltd v. CCE Ludhiana 2013 (290) E.L.T. 103 (Tri.-Del) * CCE Raipur v. Devi Iron and Power P. Ltd. 2015 (321) E.L.T. 270 (Tri.-Del) * Sky Alloys and Power Pvt. Ltd. v. Asst Comm. Cus& CGST, Raigarh2021 (378) E.L.T. 531 (Tri. - Del.) 8. In view of the above submissions, the appellant prayed for setting aside the impugned order and allow their appeal. 9. The Ld. A.R. reiterated the findings in the impugned order. 10. Heard both sides and perused the appeal documents. 11. We observe that the demand has been confirmed in the impugned order on various grounds. Our findings in respect of each of the demands tabulated in para 3 supra is furnished below: 11.1 Regarding short payment of duty amounting to Rs. 53,55,205/- on stock transfer of goods to their sister concern, we observe that initially, the assessable value was arrived at by the appellan....
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.... any other customer. We observe that when similar goods are not sold by the appellant, the valuation adopted by the Appellant is valid and thus we hold that there is no short payment of tax. Accordingly, we hold that the demand confirmed in the impugned order on this count is not sustainable and hence we set aside the same. 13. Regarding denial of CENVAT Credit of Rs.4,71,599/- taken on the goods rejected by the customers and returned to the supplier and subsequently replaced, we observe that when the goods are purchased as inputs but are later returned for being defective and are replaced by the supplier, credit cannot be denied to the supplier. In support of this contention we rely on the decision of the Tribunal in the case of Ericsson India Pvt. Ltd. vs. Commissioner of C. Ex. & S.T., Jaipur 2016 (334) E.L.T. 136 (Tri.-Del), Approved in Commr. of C. Ex. & S.T., Jaipur-I vs. Ericsson India Pvt. Ltd. 2017 (356) E.L.T. 486 (Raj.). 13.1. Regarding proof of replacement of goods, we observe that the SAP entries will prove that the goods retuned have been replaced or not. However, credit on the goods returned cannot be denied to the appellant on only procedural ground. Accordingly, ....