2026-VIL-825-CESTAT-DEL-CE
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CENTRAL EXCISE CESTAT Cases

Central Excise - Valuation of goods cleared to related party - Appellant cleared scrap to its related party (GPIL) at a lower price than the price at which the same goods were sold to independent buyers - Department demanded central excise duty on the ground that the appellant did not follow the provisions of Rule 9 of the Valuation Rules, 2000 for clearance of goods to the related party - Whether the provisions of Valuation Rules such as Rule 9 and 10 are applicable in the case where the goods are cleared from one unit to another unit of the same legal entity – HELD - The appellant and GPIL are the same legal entity post amalgamation as they share the same PAN and Corporate Identification Number. Hence, the transaction between the two units is not a "sale" under Section 2(h) of the Central Excise Act, as there are not two legal persons existed as per Section 3(42) of the General Clauses Act, 1897 for a 'sale' to happen. Since there is no transfer of ownership or consideration between two distinct persons, the provisions of Valuation Rules such as Rule 9 and 10 are not attracted in the present case - The Tribunal relied on the decision in the case of Jindal Steel and Power Ltd. vs. Commissioner of Central Tax, GST & Central Excise and held that Rule 8 of the Central Excise Valuation Rules, 2000 would be applicable for arriving at the valuation in respect of clearance of goods to own unit – Further, the demand of central excise duty is not sustainable on the ground of ‘revenue neutrality’ as the duty paid by one unit would be available as Cenvat Credit to the other unit. Additionally, the demand is not sustainable on account of limitation as there was no suppression of facts with an intent to evade payment of tax - The demand of central excise duty confirmed in the impugned order is set aside and the appeal is allowed - Irregular availment of Cenvat Credit - The appellant availed Cenvat Credit beyond the prescribed period of six months/one year from the date of invoice - Whether the denial of Cenvat Credit on the ground of procedural irregularity is justified – HELD - The receipt and utilization of the inputs in the manufacture of goods is not in dispute. The credit availed by the appellant has been denied only on the ground that it was taken beyond the prescribed period, which is a procedural requirement. The substantive benefit of Cenvat Credit, which is otherwise eligible to the appellant, cannot be denied merely because of the procedural irregularity, if any - The denial of Cenvat Credit and the consequential demand of interest and penalty is set aside
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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