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2012 (3) TMI 247 - CESTAT, MUMBAIWrong availment of Modvat Credit on capital goods - conducted physical stock verification at the premises of the three units it was noticed that the shortages of Yo Frooti was on account of clearances to their own unit in the same premises i.e. from Yo Frooti Unit to Agro Unit and there was surplus of modvat inputs in the premises of other unit(s) - overall there was no shortage or excess - Yo Frooti unit had procured capital goods for the manufacture of finished goods and declared that the actual use was for packing of Yo Frooti which was exempt from duty but revenue contented that there was no manufacture of mineral water in the Yo Frooti unit at that time and wrongly availed the duty credit of Rs.23,91,513/- on capital goods. Held that :- the goods (both the finished goods as well as raw materials) were found in the same premises, it cannot be held that there was an intention to evade duty or to avail ineligible Cenvat credit on inputs, which were found short in premises of one unit but available in the premises of other unit so it will be considered an offence of a technical nature rather than any removal without payment of duty. From the records of the case it is seen that at the time of receipt of the capital goods, the product Yo Frooti was completely exempt from duty and Yo Frooti became dutiable only after a gap of few months and the eligibility for Cenvat credit has to be determined at the time the goods are received from the manufacturer and if the goods become dutiable subsequently and the manufacturer of goods puts the capital goods to other use, the same will not revive the question of admissibility of modvat credit on capital goods - direct the appellant to make a pre-deposit of Rs.11,50,000/- within a period of eight weeks and report compliance on 10/04/2012
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