2026-VIL-1837-CESTAT-CHE-CE
  1. Home
  2. 2026-VIL-1837-CESTAT-CHE-CE

CENTRAL EXCISE CESTAT Cases

Central Excise - Denial of CENVAT credit availed prematurely on capital goods by an under-construction unit and transferred to another unit under Rule 12A of CENVAT Credit Rules, 2004 - Appellant, a Large Taxpayer Unit, had a manufacturing unit under construction which availed CENVAT credit on imported capital goods before receiving them in its factory and availed one hundred per cent credit in the same financial year, and transferred the credit by challan to its other unit, which utilised it for payment of duty - Revenue alleged that the credit was taken without receipt of capital goods, that the restriction under Rule 12A(4) as amended was wilfully violated, and that the recipient unit did not ensure eligibility, and the demand was confirmed against both units - Appellant contended that the lapse was an unintended oversight, that the recipient unit had reversed the credit before the SCN and informed the Department, and that the demand amounted to recovery twice - Whether the demand confirmed in the impugned order is in accordance with law - HELD - The recipient unit had reversed the transferred credit much before the SCN on being informed of its ineligibility, and the transferor unit, though eligible, did not take credit of the disputed amount, so the total denial of credit in its hands is not in accordance with law. Upon commencement of production the transferor unit was eligible for the credit, and at the most there was premature availment prior to receipt of the capital goods, which is a procedural lapse that cannot take away a substantive right where eligibility is not in dispute, as held by this Bench and other Benches of the Tribunal. As regards availment of full credit in the first year instead of fifty per cent, the Hon'ble Bombay High Court has held that where the balance credit wrongly taken is not utilised before the subsequent financial year commences, no prejudice is caused to Revenue. The Commissioner himself admitted that the Appellant is eligible for the balance credit in subsequent financial years, and the other grounds raised became academic - The denial of CENVAT credit and the confirmed demand cannot be sustained, the impugned order is set aside and the appeal is allowed
Download File

Quick Search

/

Advance Search

GST Resources

/

Gst Rate Finder

Tax Vista

Your Weekly Tax Recap

By Dr. G. Gokul Kishore

Weekly Summary

VIL Video

57th GST Council Decisions...
By CA Vivek Jalan

Create Account

Security-Code
New Code?

Log In

New User ? Forgot Password ?

Forgot Password

Security-Code
New Code?
Please Note: This facility is only for Subscribing Members.

Email this page

Security-Code
New Code?

Feedback this page

Schedule a Demo

Schedule a demo to know the features and advantages of VILGST portal. Get to know the tips to find the desired results in faster way.

Security-Code
New Code?

Caselaw Request Form (CRF)

Didn’t find what you are searching for? No worries, please give us the following details and VIL will email you the desired Caselaws at the earliest:

Security-Code
New Code?