The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), in a setback to Hindustan Coca Cola Beverages, dismissed the appeal filed by the Company and upheld an order of the department imposing interest and penalty while recovering an amount of Rs.75,930/-.
The appellant herein is involved in manufacturing of water including mineral water and aerated water and was also availing CENVAT Credit facility on inputs, capital goods, and input services under the CENVAT Credit Rules 2004.The Department observed that the appellant has not paid the amount equal to the duty leviable on transaction value on the clearance of capital goods, as per proviso to sub rule 5A (a) (II) of Rule 3 of CCR, 2004. Accordingly, Show Cause Notice was served upon the appellant.
While considering the second appeal filed by the assessee, Judicial Member Ms. Rachna Gupta observed that “In the present case, apparently and admittedly it is not the case of the appellant because the appellant has transferred the capital goods/ generator set from one of its unit to its another unit. If such a generator set would have been cleared by the appellant to any other unit, appellant definitely would have to reverse the proportionate credit on the depreciated value after deducting 2.5% of credit for each quarter or part of the use of machine from the date of taking of such credit as is apparent from Rule 3 as quoted above. Also the proviso to above said Rule, as quoted above provides that if the amount so calculated by the above method is less than the amount equal to the duty leviable on transaction value, the amount to be paid shall be equal to the duty leviable on transaction value.”
Upholding the order of the department, the Tribunal held that “The provision makes it clear that the transfer of possession of goods is the essence of sale and transfer of goods between two individual members takes place during the transfer of goods. Applying the same to the present case it is clear that the possession of the generator set has been transferred from one person to another and from one place to another for cash. The definition don’t exempts the transfer between two sister units.”
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