2018 (11) TMI 356 – CESTAT NEW DELHI – TMI – CENVAT Credit – inputs which were subsequently cleared “as such” to their sister unit without reversal of credit – Rule 3(5) of Cenvat Credit Rules – time limitation – Held that:- The appellant being the public sector undertaking cannot be saddled with any malafide suppression or mis-statement, with intent to evade the payment of duty. In any case the credit required to be reversed by the Appellant was available as credit to their sister units, who could be utilise the same for the payment of duty of excise. Thus leading to a Revenue neutral situation even after the subsequent obtaining of centralised registration, the appellant was paying the entire duty on behalf of the other units.
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In as much as and admittedly Revenue neutral situation is involved in the present appeal and the appellant is a PSU, the extended period is not invokable – appeal allowed – decided in favor of appellant. – Appeal No. E/51317/2017- (DB) – Final Order No.
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voking the longer period of limitation. Proposing to confirm the demand of around two lacks crores approximately. The said Show Cause Notice culminated into an order passed by the Commissioner confirming the demand along with the interest and imposition of interest of identical amount. The said order of the Commissioner is impugned before us. 2. Ld. Advocate on behalf of the appellant bring to our notice that subsequently they obtained the centralised registration and a common return on behalf of all the units were being filed by them. As such he submits that there is no dispute after the period of registration. Prior to Registration, they had availed the credit and transferred the inputs to their sister units, who had utilised the same for manufacture of their final product, which was leviable to duty of excise. As such he submits that duty required to be paid by them was available as Credit to their sister units and the entire exercise was Revenue neutral. In such a scenario no malaf
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ppression or mis-statement, with intent to evade the payment of duty. In any case the credit required to be reversed by the Appellant was available as credit to their sister units, who could be utilise the same for the payment of duty of excise. Thus leading to a Revenue neutral situation even after the subsequent obtaining of centralised registration, the appellant was paying the entire duty on behalf of the other units. 5. As per the Hon ble Mumbai High Court s decision in the case of Commissioner of Custom & Excise & S.T., VAPI vs. Tarapur Grease India Pvt Ltd. 2016 (334) ELT 416 (Bom.), the identical issue stands considered and it stands held that non reversal of removal of inputs as such to their sister units involves the doctrine of Revenue neutrality. As the Tribunal had set aside the demand in that case but imposed penalty on technical contraventions, Hon ble High Court held that even penalties were not imposable. To the same effect is the decision of the Mumbai High Co
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