CX - Appellant supplying standby transformer to client when one initially sold is received for repairs - after repairs, standby transformer is received back in factory and appellant takes credit of duty paid thereon while initially clearing same - Revenue objecting to taking such credit - stay granted: CESTAT
By TIOL News Service
MUMBAI, APR 28, 2014: THE applicant manufactures transformers and clears the same on payment of duty. Sometimes, the transformers which were supplied to the customer are returned for repairs. In that situation, the applicant is providing a standby transformer for the period of repair of the transformer sold to the customer. The transformer which was sent as a standby for a short period is cleared on payment of duty and after the repair, the repaired transformer is cleared; the standby transformer is returned to the factory and on which the applicants are taking credit of the duty initially paid on the same.
Revenue is not at all happy with this standby business and is of the view that the applicant is not entitled to take credit on the said standby transformer which is returned as same is not an input and the credit cannot be taken on the strength of the applicant's own invoice which is not a proper document under the CENVAT Rules.
The lower authorities denied the credit and hence the appellant is before the CESTAT with a stay application.
They submit that their case is covered by Rule 16 of CER, 2002 and place reliance on the decision in Bunty Foods (India) Pvt. Ltd. - 2008-TIOL-516-CESTAT-MUM.
The Bench in a crisp order observed -
"4. Considering the submissions made by the applicant and relying on the above cited judgment, the applicant has made out a case for 100% waiver of pre-deposit. Accordingly, I waive the pre-deposit of entire amount of duty, interest and penalty and stay recovery thereof during the pendency of the appeal."
(See 2014-TIOL-653-CESTAT-MUM)
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