18 December 2013
Dear Experts , PLease Clarify the same
Input Goods were imported and Subsequently traded due to excess stock (which were not used in manufacturing). The CVD Credit on the same was thus passed on to the buyer of the goods. This CVD credit was split into BED and cess to the Buyer.
For Instance CVD credit on imported input good rs.100(excluing cess, since not eligible to claim the same.
While passing on the good the same 100 rs has been split as BED Rs.98 and Cess Rs.2
Is this correct? As we have taken credit for basic of rs100 but reversal is done on Rs.98 of basic and 2 of cess.
In case of clearance of inputs as such on which credit has been availed, then the rule stipulate that the credit availed has to be reversed. In this case, as you have short paid Rs.2/-, the department can very well demand for the short payment of the basic amount.
18 December 2013
But since we have reversed cess of 2rs more , can this be taken as stand? If not, can u please suggest any case laws or reference to any section .
In legal terms, this can not be an excuse. The ideal course of action would be to pay the difference and seek refund for the excess payment. But getting refund will not be possible as your customer would have availed the cenvat credit of the cess amount. This is my personal opinion.
CAclubindia
