CENVAT Credit of Excise Duty Allowable on outward Transportation and Eligible to take Suo Motu re-credit: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the CENVAT credit of excise duty is allowable on outward transportation and also eligible to take the suo motu re-credit. 

Welspun Corp Ltd, the respondent-assessee had availed CENVAT credit in respect of outward transportation which was disputed by the department by issuing a show cause notice and proposing to deny CENVAT credit on outward transportation. 

The revenue appealed against the order passed by the adjudicating authority for the eligibility of CENVAT credit on outward transportation in the assessee’s case attained finality in their favour. 

Rajesh Agarwal, the counsel for the department contended that the assessee was not entitled to take the suo motu re-credit. 

Hardik Modh, the counsel for the assessee contended that the assessee had reversed CENVAT credit because the department has disputed the CENVAT credit on outward transportation and the proceeding for disallowance of such credit was carried out and the CENVAT credit was allowed by the Tribunal. 

Also submitted that because of the Tribunal Order, the assessee had legally and correctly re-credited CENVAT credit which was also reversed. 

The Bench observed that in the case of Ratnamani Metals & Tubes Ltd vs. CCE & ST, the court held that there was no dispute that under reverse charge mechanism, the assessee discharged the Service Tax liability by debit in the CENVAT account and there was no dispute that the credit balance in CENVAT account during the material period was an eligible credit to assessee. 

The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) upheld the decision of lower authorities to take suo moto re-credit of CENVAT credit which was reversed by the assessee. 

To Read the full text of the Order CLICK HERE

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