The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the penalty on reversal of cenvat credit in the matter regarding electricity supplied to sister concern.
As regard the short reversal of Cenvat credit on electricity supplied to sister concern, the counsel for the appellants submitted that the demand is not contested. The counsel only requested to waive the penalty. Similarly, regarding denial of Cenvat credit on service tax paid on renting of godown situated outside factory premises it was contended that the Cenvat credit amount was paid.
The counsel relied on the judgment of Vandana Global wherein it was held that the transaction value in the present case is the value at which the Silicon Manganese has been sold by the appellant at its factory gate, while transferring the unsold portion thereon to the Depot. Apparently and admittedly, the excise duty has been paid by the appellant at the said value. The question of alleged short payment does not at all arise.
A Two-Member Bench of the Tribunal comprising Ramesh Nair, Judicial Member and Raju, Technical Member observed that “As regard the short reversal of cenvat credit on electricity supplied to the sister concern, the appellant has paid the amount of Rs. 25,589/- and on merit no contest was raised.”
“In our considered view since the electricity was supplied to the sister concern, the cenvat related thereto is not admissible to the appellant and there is no ambiguity in the legal position therefore penalty corresponding to such reversal of cenvat credit imposed by the Adjudicating Authority is correct and legal and the same is upheld” the Tribunal concluded.
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