By TIOL News Service

MUMBAI, SEPT 12, 2013: THE applicants have two units, one is R&D unit and the other is tractor unit. Some parts are being manufactured in R&D unit, which are being transferred to tractor unit. When the goods were cleared by R&D unit to tractor unit, certain expenses were not included in the assessable value as per CAS-4.

The Revenue alleged that these expenses are includible in the assessable value and, therefore the demand was confirmed against R&D unit.

Against the said order, the appellant went in appeal before the CESTAT and the matter was remanded. Once again the demand was confirmed by the adjudicating authority.

So, the applicants' R&D unit issued supplementary invoices including the cost and expenses which were not included in the assessable value earlier, as alleged by the Revenue, and paid duty on that.

On the strength of these supplementary invoices, the applicants took CENVAT credit.

Now, Revenue took a stand that the applicants are not entitled to take CENVAT credit on the strength of supplementary invoice as it is an invalid document in terms of the provisions of Rule 7(1)(b) of the CCR, 2001.

After hearing both sides, the Bench observed -

“4. It is not in dispute that duty has been paid by R&D unit. Therefore, the applicants have taken the credit on the strength of supplementary invoice. Whether the credit is admissible or not has to be seen at the time of final hearing. As the duty has been paid and on the strength of that, they have taken the credit, therefore the applicants have made out a case for 100% waiver of pre-deposit. Accordingly we waive the requirement of pre-deposit of duty and penalty and stay recovery thereof during the pendency of the appeal.”

(See 2013-TIOL-1348-CESTAT-MUM)