2026-VIL-1036-CESTAT-KOL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Excise duty valuation where finished goods manufacturer supplies raw materials to sister concern and recipient availing Cenvat credit – Revenue Neutrality – Demand of differential excise duty on the ground that the assessable value adopted by the appellant based on CAS-4 certificate was lower than actual costing, resulting in short payment of excise duty for the period extending over several years - Whether demand for short payment of excise duty can be sustained when the goods supplied to a sister unit are used as raw material and the recipient fully avails Cenvat credit for the excise duty paid, irrespective of the assessable value adopted by the supplier, thereby creating a revenue neutral situation – HELD - Since the goods cleared by the manufacturer are used by the receiving unit as raw material, the receiving unit takes Cenvat credit for the invoices raised by the manufacturer. Irrespective of the assessable value adopted by the manufacturer, the excise duty paid thereon is fully available and availed as Cenvat credit by the receiving unit. This constitutes a clear case of revenue neutrality where no prejudice to revenue occurs. The Revenue has failed to make out any case for imposing the demand on the manufacturer. Additionally, all factual details were reflected in the excise returns filed monthly while clearing goods to the sister unit, thereby negating any allegation of suppression by the manufacturer - The impugned order is set aside on merits and also on grounds of time bar. The appeal is allowed
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