2026-VIL-778-CESTAT-MUM-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Non-reversal of Cenvat credit on SAD component during transfer of inputs 'as such' from one unit to another - Appellant cleared certain imported inputs 'as such' from one of its factory units to another. While making such transfers, the appellant had reversed the Cenvat credit taken on CVD and education cess but not on the SAD component -Department issued notices invoking Section 11A(4) of the Central Excise Act, 1994, for recovery of the duty along with interest and penalty - Whether the invocation of the extended period under Section 11A(4) for demanding the Cenvat credit taken on the SAD component was justified, and whether the revenue neutrality argument put forth by the appellant was applicable in the instant case - HELD - The appellant had admitted that the reversal of the Cenvat credit on the SAD component was required, but due to the inadequate knowledge of its staff, it was not done. However, when the matter was brought to the appellant's notice during the Special Audit, the appellant refused to make the reversal, citing the lapse of the normal period of limitation under Section 11A(1) - The revenue neutrality argument put forth by the appellant was not applicable in the instant case, as the appellant had chosen not to make the payment or reversal after the normal period, which would have precluded it from availing the Cenvat credit under Rule 9(1)(b) of the CCR, 2004. The failure to acknowledge the transfer in the ER-1 return and the appellant's refusal to make the reversal after being pointed out by the department, along with the lapse of time, were indicative of the appellant's intention to evade the payment of duty, thus justifying the invocation of the extended period under Section 11A(4) - The orders of the lower authorities, confirming the demand along with interest and penalty is upheld and the appeal is dismissed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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