Inferring that excess credit has been taken by recalculating CENVAT credit based on price charged by registered dealer is not sustainable
THE appellant took CENVAT credit on the strength of invoice issued by registered dealer.
On the invoice, in addition to particulars of goods being sent to the appellant, the dealer also mentioned particulars of duty payment, quantity and value of goods received from the original manufacturer.
Although the amount of duty paid per unit quantity of the goods by the original manufacturer on pro-rata basis could easily be calculated from the particulars of the original manufacturers, the lower authorities recalculated the amount of duty paid per unit quantity on the basis of the value charged by the dealer to the appellant and inferred that the appellant has taken excess CENVAT credit on the said inputs.
Too complicated, one may say, but that is how the lower formation acted, probably without even ascertaining as to what was the quantum of CENVAT credit actually taken by the appellant.
Anyways, we presume that the Commissioner(A) found this too fuzzy to interfere and he upheld the demand against the appellant.
The CESTAT after hearing both sides observed -
"4. It is not in dispute that whatever duty has been paid by the appellant, they have taken the credit of the same. As per provisions of CENVAT Credit Rules, 2004 assessee is entitled to take credit of the duty paid. In these circumstances, the allegation of excess credit taken by the appellant is not sustainable. Accordingly, impugned order is set aside, appeal is allowed with consequential relief."