The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the restriction on availment of CENVAT Credit in respect of supplementary invoices as provided under Rule 9(1)(b) of Cenvat Credit Rules(CCR), 2004 was applicable only in a case where the clearance of goods by the supplier was made by way of sale of goods and not otherwise.
Hindustan Unilever Ltd, the appellant assessee was issuing supplementary invoices paying differential duty on the Bulk Detergent Powder stock transferred to the Indu Home Care Product during the period June 2012 to August 2013.
The assessee appealed against the order passed by the adjudicating authority for denying the CENVAT credit under Rule 9(1)(b) of CENVAT Credit Rules and for the imposition of penalty under Rule 26(2) of the Central Excise Rules, 2002.
Manshi Patil and Viraj Reshamwala, the counsels for the assessee contended that the assessee received the goods not as a purchase, but on a returnable basis for job work and no sale was involved, and the provision of Rule 9(1)(b) of CENVAT Credit Rules was not applicable.
Ashok Thanvi, the counsel for the department relied on the decisions made by the lower authorities and contended that the penalty imposed against the assessee was as per the law and liable to be sustained.
The Bench observed that in the case of the sale of goods, the restriction of CENVAT Credit on the supplementary invoice was applicable and in the present case, the transaction is not a sale transaction the restriction shall not apply.
The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) held that where there was no sale of goods and only a stock transfer the restriction of availing of CENVAT Credit on the supplementary invoice in case of nonpayment or short payment of duty by the supplier unit shall not apply.
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